Tokenomics is the study and analysis of the economic aspects of a cryptocurrency or blockchain project, with a particular focus on the design and distribution of its native digital tokens.
[6] Tokenonomics can be thought of as an approach to implementing monetary policies and economic rules via automated smart contracts.
[6] On the blockchain, different projects may issue their own tokens with different tokenomics to complete their ecosystem for various purposes, such as fundraising and governance.
Tokens are created to encourage the holder to interact and empower the product by automatically distributing the rewards to their stakeholders.
To achieve the purposes and function of the tokens created, a fine tokenomics structure is needed.
[1] In the decentralized, automated world, with lower cost, tokens can be created by anyone, with fundamental parameters and functions described by tokenomics.
[1][further explanation needed] Instead of equities, blockchain companies raise funds through the issuing of tokens in the process of initial coin offerings (ICOs).
[10] For example, with a token named Smooth Love Potion (SLP) in the game Axie Infinity, players can use it to breed desired spirits.