What Are “Tokenomics” and Why Are They Critical in a Whitepaper?

Tokenomics refers to the economics of a cryptocurrency token, encompassing its creation, distribution, supply, utility, and incentive structure. It details how the token's value is generated, maintained, and how it aligns with the network's participants.

They are critical because they determine the long-term sustainability and potential for value appreciation of the token. Poor tokenomics, such as excessive supply or misaligned incentives, can lead to inflation and token value collapse.

Investors must assess the supply schedule and distribution model.