The difference between token and coin should also be clarified . A coin is a cryptocurrency native to the blockchain on which it is based, for example bitcoin for Bitcoin or ether for Ethereum. A token, on the other hand, is based on a blockchain external to its project. For example, all ERC-20s are tokens that use the Ethereum blockchain, but which feed their own network, not Ethereum's. Tokenomics encompasses both types of cryptocurrencies.
The relationship between the development of tokens, products, and community-associated features is direct and proportional. The more the community is heard, included, and considered, the greater the momentum and presence of the token . An example of this type of practice can be seen in Ethereum's The DAO, whose organized community keeps its entire structure running. But the same goes for cryptocurrencies like Bitcoin, Litecoin, Dash, and many more. In the end, it is the community that keeps the token and its associated technology running and evolving.
Once a community interested in the token is created, it is necessary to promote its use within the community. This is only possible if the tokens are distributed for use. To achieve this, several measures slovenia whatsapp data can be implemented: the main one is mining. This is a process that rewards those who provide computing power to form, protect and validate transactions within the token network. Another way is through initial coin offerings (ICOs), airdrops or other means of token distribution. The goal of this strategy is to achieve the widest possible distribution, decentralizing power .
Token economy
Tokenomics must address a number of variables , including:
Supply and value
The distribution
Inflation or deflation
Use cases
One of the biggest challenges of the token economy is to achieve value stability : in fact, fluctuation becomes a serious problem when third parties can exploit it for profit, a process that leads the network to become unsustainable and no longer viable. The stabilization dynamics go through two important points: the flow, supply, of tokens and a monetary policy that controls prices, governing periods of inflation and deflation.
Token distribution and allocation are fundamental metrics in tokenomics to mark the level of decentralization and ethics of the project. In fact, not only is how they are distributed at the time of analysis evaluated , but also their allocation at launch. A successful launch usually sees a small community start mining the coin or earning it with a meritocratic incentive program.