The US dollar would have some of the worst tokenomics in the crypto space if it were a cryptocurrency. It has a year-on-year inflation rate of about 3%. It has no supply limit and can be printed by central banks at any time. A limited number of people control the majority of the circulating supply. As a result, it is a terrible long-term investment.
In the crypto space, on the other hand, it's incredible that almost every single crypto coin has its own tokenomics. Furthermore, the open-source aspect allows everyone to see exactly what is happening with their favorite tokens. However, the tokenomics of cryptocurrencies, are not invulnerable.
Token allocation is an important tokenomic aspect to keep an eye on. Instead, at the beginning, a genesis block was mined by one or more parties without any special token distribution. This is referred to as a reasonable launch, which is sadly quite uncommon in the crypto world. This typically means allocating a fixed percentage of a token's initial or complete supply to particular parties or reasons. Some of these tokens are given to the project's creators, while others are given to early investors, with the rest of them going to the ICO and mining or staking rewards for all who would participate in the crypto's ecosystem.
First and foremost, make sure that those tokens have been distributed in the manner that was originally outlined in the ICO documents. You can do this by using the block explorer. Your goal is to find out which wallets have a large number of tokens and if those tokens could be sold quickly if the price rose dramatically. If you see a single wallet with more than ten percent of its total supply, be careful. In addition to this statement, consider the staking mechanisms. Is it considered profitable for these whales to hold their coins?
It's great, even helpful, that the team sets aside a portion of the token for the project's growth. You must keep an eye on the team's share of the project: it can range from 10% to 30% for realistic projects.
On the other side, coins like Ripple (XRP), for which the team holds 60% of the total supply. This kind of distribution is a major danger for token holders. For instance, it's a huge centralization vector. Furthermore, it implies that the team has extensive control over the price of its coin.
