Tokenomics

When you enter the world of NFTs, the traditional models of economic behavior slowly peel away and give way to a system defined by decentralization. To understand the art of NFTs, Tokenomics becomes an important part of the discussion. Simply put, Tokenomics is the amalgam of 2 words, Token and Economics. It revolves around the measure of the ‘quality’ of a token. One might ask: How do you define the quality of a token? It is basically anything that might impact the value of a token. All of these factors combine together to spit out a final number for a token, which becomes the value of that token.

We have already witnessed the mass adoption of cryptocurrency. Society is already being redefined in so many ways with these inventions catalyzing progress to usher in a new era of blockchain powered assets as the ultimate democratic tool. Safe to say, in the near future, universities will be teaching courses on Tokenomics.

Tokens

Let’s dig into the definition of a token. In the crypto-ecosphere, a token becomes the building block of the Decentralized Autonomous Organization. A token issued by a company and acquired by an individual represents that individual’s own interest in the collective pie. It incorporates them as a fractional owner of the DAO. The big difference between this and a stock in a listed company is that tokens actually afford the individual power to affect the decision making of the company in a very meaningful way.

More than anything, the advent of tokenomics signals an important shift in how the democratization of assets is carried out. Gone are the days of investing in a company having no control whatsoever of its decision making. This is the era of the empowerment of the individual. We are owned by the people, run by the people, and loved by the people.