Tokenomics refers to the set of rules and principles established by a game studio for its governance token(s). A governance token serves to stabilize the economy and is typically used for purchasing NFTs in the marketplace.
In most tokenomics models, expenses and a significant portion of rewards are outlined, with a focus on player incentives. Rewards are often distributed using another on-chain and/or off-chain token. For instance, in Axie Infinity, $AXS is used for governance, while $SLP serves as an in-game rewards token.
In-game rewards tokens are generally less valuable and less scarce, contrasting with governance tokens that represent a more unique token with additional benefits in the form of smart contracts.
To understand a game's tokenomics, consulting its "whitepaper" is essential. A whitepaper is a document outlining how the token is allocated among team members, players, and game development. Additionally, ongoing coverage by writers can provide insights to avoid investing in potentially unstable new studios.
Determining Solid Tokenomics:
Adequate Developer Funding:
Vesting Period of at Least 12 Months:
Listing of Governance Token on a Centralized Exchange (CEX):
Availability on Decentralized Exchanges (DEX):
Assessing these factors helps gauge the solidity of a project's tokenomics, emphasizing financial stability, commitment from the development team, and accessibility for token holders.
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