How Does the Concept of ‘Tokenomics’ Influence the Sustainability of a Long-Tail Asset’s AMM Pool?

Tokenomics, the design of a token's economic system, critically influences the pool's sustainability. Factors like emission schedules, utility, and distribution affect the token's long-term value and demand.

If the tokenomics fail to create sustainable demand or incentivize LPs (e.g. through high, unsustainable yields), the pool's liquidity can dry up, leading to high slippage and ultimately failure.