Tokenomics refers to the economic structure of a cryptocurrency token — encompassing total supply, circulating supply, token distribution, inflation schedule, utility, and incentive mechanisms.

Well-designed tokenomics align the incentives of all participants — developers, investors, and users — to support the long-term health of a project. Key components include how tokens are allocated (team, investors, community), how and when they are released (locking and vesting schedules), and how the token accrues value.

Token locking and vesting are important tokenomics tools. Locking team allocations or LP tokens provides investors with verifiable proof of commitment and reduces the risk of early selling pressure.