What the heck is Tokenomics? Please no math.

You sound even more like a utopian Lunatic talking about how the whole world is gonna change or whatever. But what’s this headline about ‘tokenomics’ all about?

Woah, they have a really robust roadmap? Bullish. Why are token economics important though?

Oh God, here he goes again. Why can’t we just talk about politics like normal people.

No it doesn’t, I’ve seen prices skyrocketing everywhere. And look at the price of gas!

I heard it was because the money printer go brr.

Sounds simple enough. I demand you supply more info on tokenomics though.

Isn’t Bitcoin issuing more tokens every day? Why doesn’t that inflate the value away?

Ok so when more people bring more money in the ecosystem, prices rise and everyone gets richer. It’s dependent on more people? Explain why all of this isn’t a Ponzi.

  • In crypto games, the non-financial value often is playing the game for entertainment, creating a strong pvp player base, or getting exclusive in-game assets.
  • In profile picture art projects, the non-financial value often is the networking or friendship of the community or simply wanting to support the artist on their journey.
  • In DeFi, the value often is in the form of rewards for supporting the protocol or governance, which underpins risk management and capital liquidity. Usually DeFi is financial value though, for obvious reasons (it’s in the name).
  • Mix and match any of the sectors and traits above to get new combinations. Value can be created in a vast array of ways.

Right, I think I’ve got it. Tokens underpin crypto communities, most tokens are different, and thus difficult to compare easily. The more people want to sell, the lower the price goes. Value is created for the token when humans cooperate effectively within well designed tokenomics and governance structures to make goods or services for the broader economy.

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