Tokenomics of Crypto Coins: A Complete Guide for Beginners.

Are you thinking of investing in a crypto coin? Or have you heard that this token has very strong tokenomics? But what does it mean?

If you are new to the world of crypto, then tokenomics is an important term that you should understand. In this blog, we will learn in simple language what tokenomics is, what its parts are, and why it determines the future of every crypto project.

What is tokenomics?

Tokenomics = Token + Economics

It is the economic strategy of any crypto token—like how it is created, what its supply is, who owns it, how it is used, and how its value increases or decreases.

Tokenomics tells us.

• What is the total supply of the token?

• Who all are allocated to it?

• How will the token be used?

• Who will hold or sell it?

• Will it be burnt, or will new tokens be created?

Just like a country has an economic policy, every crypto coin has its own tokenomics policy.

Key parts of tokenomics

1. Token Supply:

• Total Supply: The number of tokens that will ever be created.

• Circulating Supply: The number of tokens currently running in the market.

• Maximum Supply: The limit set in the code, like Bitcoin's 21 million

Low supply + high demand = high price, i.e., only the scarcity of a token can increase its price.

2. Token details: i.e., who will get how much of the token? It usually looks something like this:

• Team and founders—10-20%

• Early investors—10-30%

• Community (Airdrops, Referral) – 5-15%

• Project funds—10-15%

• Rewards/Mining—20-50%

If a lot of tokens are held by founders or investors, the risk increases that they may sell them all at once and bring down the price.

3. Locking and vesting:

Instead of giving tokens to investors and the team immediately, they are given according to a time-bound schedule:

• Cliff vesting: Fully locked for a few months

• Linear vesting: Slow release every month

• Milestone vesting: Release according to the stage of the project

This system helps maintain price stability.

4. Token usage:

If the token has no use, why would people hold it?

• For payments

• For governance voting

• For staking

• Access to NFTs or games

• For paying gas fees

A token that has true utility has sustainable demand.

5. Burning and Minting:

• Burn = burn a token, i.e., destroy it permanently.

• Mint = create new tokens (e.g., as a staking reward)

Some tokens reduce their supply via burning (e.g., BNB) in order to increase the price.

6. Inflation vs. Deflation:

Inflationary Token—New tokens are created over time (e.g., Doge coin).

• Deflationary Token—the number of tokens decreases over time (e.g., Shiba inu , BNB)

Inflation increases supply, which can decrease value.

Deflation causes scarcity, which can increase value.

Types of Token Models

A. Fixed Supply Token (Deflationary)

• Limited supply: new tokens cannot be created.

• Example: Bitcoin

B. Dynamic Supply Token (Inflationary)

• New tokens are created by staking/minting.

• Example: Ethereum

C. Hybrid Token Model

Some tokens are created; some are burnt.

• Example: BNB, SHIB

Why is tokenomics important for every investor?

When you invest in a coin, be sure to ask these questions:

• What is the total supply?

• How much stake does the team own?

• What is the function of the token?

• Is there a burning or minting system?

• Is there a vesting schedule?

Good tokenomics = stability + long-term growth

Bad tokenomics = short-term pump and crash.

Some key examples

1. Bitcoin (BTC):

Max Supply: 21 million

• Mining rewards are halved every 4 years (halving).

• Strongest deflationary model

2. Ethereum (ETH)

• Was inflationary before

• Now implemented a burn system (EIP-1559)

• Staking rewards + partial deflation

  
  

3. Shiba Inu (SHIB)

• Huge supply initially

• Now a massive burn has happened.

• Community-driven model

What will the future of tokenomics be like?

• AI-based token models that adjust supply according to demand

• Rewards based on user behaviour. (proof of behaviour)

• Gamified token economy + NFT integration

• On-chain governance and transparent token release model

Always remember: tokenomics is not just a technical term—it is the soul of any crypto project. It helps you understand how much potential a project has: is it just hype, or is there any real use?

To succeed in crypto, check tokenomics, not just price.

Also start free mining Di Coins by visiting www.dicoin.co.in. Thanks.