Tokenomics (token economics) refers to the economic model and design principles governing a cryptocurrency's supply, distribution, and utility. This encompasses total supply, emission schedules, token allocation (team, investors, community), burning mechanisms, staking rewards, governance rights, and use cases within the ecosystem. Strong tokenomics align incentives among stakeholders and create sustainable value capture mechanisms that support long-term price appreciation.
Example:
A project launches with 1 billion tokens: 20% sold in public sale, 15% to the team (vested over 4 years), 10% to early investors (2-year lock), 30% for staking rewards distributed over 10 years, and 25% for ecosystem development. If the token also has a burn mechanism removing 2% of transaction fees permanently, the effective circulating supply decreases over time, potentially increasing scarcity and value.