WHAT IS THE IDEAL TOKENOMIC OF CRYPTO PROJECTS

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The term TOKENOMIC is coined from two defined and distinct words of Token and economic so in a simpler and clear meaning of the term "Tokenomic" as the Economic model and system of the token and the project in its ecosystem.
As a store of value, Token of any project should be measured and valued highly. Tokenomic of any token does have these Token features which are sales, distribution, supply and demand forces, utility and its incentives and system that determine its values within its ecosystem.
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The nature, usage and purposes of every Crypto projects determines its tokenomic and every project have "ideal" tokenomics and token features. Lets explore them and examples carefully.

1) TOKEN DISTRIBUTION

It refers to the allocation of token of the project especially its initial or pre sales or offering of the token. It involves the public and private sales, token pre-sales, airdrops, mining rewards and form of initial coin offering used. The distribution patterm of the token will affect the prices, value, token ownership and liquidity provision.

In 2009, during the initial distribution phase of bitcoin. A process called [Mining](
on which every successful block verified and validated with 50 BTC as a reward of solving the cryptograhic puzzle with high graded computers. A process know as "halving" was adopted and in every four years to decrease the money and lure many investors.

Since Ethereum was launched and issuance of its native token, Ether to the investors, public and private sales. This decentralized network used the several means for this offering which include offering of small fraction of ether in the very first genesis block verified, use of crowdsale, mining rewards, airdrops, purchase and sales on exchange platform. This distribution method and its consensus mechanism of Proof-of-Stake where the Ether holder can stake their token and earn rewards helps to stabilize the ecosystem and ensure efficient tokenomic of the network.

2) TOKEN SUPPLY.

The number of token ever minted or capped on the project determine its tokenomic as it will decide its amount on the market space. Some project have fixed supply which means that the number of the total token of this project are predetermined. Others are deflationary like Bitcoin with 21 million token via halving, the number keep decreasing while many are inflationary like Hive on which minting of new token are ongoing and mostly as rewards.

This rate of creating of token and its inflation will determine its scarcity, price stability and the viability of the project.

3) TOKEN UTILITY.

The role and function of token within its ecosystem determine its utility and value. Like Ether in Ethereum and Sol in Solana are used for transaction, paying of gas, accessing some facilities, participating in governance and as a tool to earn incentives and rewards.

The value placed on token on its ecosystem and its nature will surely determine its tokenomic. For instance, Bitcoin is created as a store of value like fiat currency which is used for transaction. With this, its dominance on the crypto world keep increasing and well known globally. Others like privacy token like Dash, Monero facilitates transaction with identities of their holders protected thereby improving its tokenomic and utilities.

Also, as a transaction fee for the leading and reputable exchange platform on earth which Binance with its native coin called Binance Coin (BNB) is very prominent and highly valued since its platform attract millions of crypto lovers with huge trading volume on its ecosystem.

4) TOKEN ECONOMIC

The interplay of the two major forces of supply and demand of the token will determine its value, price and in extent its long term viability.

When the circulation supply is very high and its inflationary supplied, with corresponding low demands. The value and price will be considerate low except there are other factors that will checkmate its availability on the market space.

The economic incentized mechanism on the project will determine the tokenomic and availability of token on the market floor as well as its price. Such incentive mechanisms includes staking, yield farming, upvote etc whice encourage desired activities while other mechanism like "downvote" like Hive and its layers show unwanted activities which helps to secure the network and its sustainability.

5) TOKEN BURNING.

Most of crypto projects have means of removing excess token from their ecosystem. Some of such project encourage some of the token be sent to null addresses where they will never be allowed into circulation again thereby creating scarcity, reducing supply and redistribution of the token which improves the value and price of the token.

In some crypto project like Hive and some of its layers, Tokens are used in promotion and boasting of the posts. This means acts as burning of the token thereby reducing its supply and creating scarcity thereby formulating an ideal tokenomic for such projects.

CONCLUSION

Every crypto project manage its tokenomic and finances effectively. This focuses on the careful examination of the nature and uses of the native of token which is determined by its distribution, sales, supply and demand on the market platform. Also, the effective tokenomic of the project will defines the market trend and value of project as determined by its investors and traders' behaviours thereby ensuring its sustainability and long term viability of the project. Thanks to @anomadsoul and @idiosyncratic1 for this topic and contest.

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