TOKENOMICS: Analyzing the value of a coin

Token Economics or Tokenomics refers to a collection of metrics that impact the value of a coin or token and help in determining how qualitative it is.  

Because price increase is a sure way to make money in crypto, many crypto newbies often make the mistake of using a coin's price as the determining factor for buying it. "It's less than $1 right now", they say, "so I'm going to buy it right away, so that when the price gets to $20, I'll make millions". 

But this is not always the case, many times than not. Because price is not the determinant of how viable a coin is. For example, Dogecoin was launched in 2013, but it's all-time-high price as at August 2021 is $0.73 (in May 2021), 8 years after the meme currency was created. But in contrast, Binance Coin was just launched in 2017, but the BNB price has already hit an all-time-high of $686 (in May 2021), barely 4 years after it was created. 

Within barely four short years, BNB price has grown to almost $700, while DOGE price is yet to reach $1 after 8 years of trading. The simple reason for this is TOKENOMICS. The tokenomics of Dogecoin and BNB are not the same. One is better than the other, and your guess may be as good as mine which of them it is. 

Tokenomics answers practically the question of quality, value and viability of any coin or token by assessing various metrics including: Design, Supply, Utility, Staking, Allocation and Distribution, Inflation, and Vesting. Let's look at each of these tokenomics vectors in more details.

Excerpts from the new book titled "Crypto 4 Newbies" written by Paul Anunaso.

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