Have you noticed that almost every project announces its tokenomics before TGE? This is also one of the most important metrics for project teams. Today, I happen to have some free time to break down this system for everyone.

**What is Tokenomics?**

Simply put, it’s like a country’s economic policy. Imagine you take over a newly established small country and need to make decisions: How much money will you print? How will you distribute it? What can the people do with the money? How to ensure the money doesn’t depreciate too quickly?

All these rules together constitute the project’s tokenomics. Well-designed rules lead to steady price appreciation; poorly designed ones can cause the token price to plummet to zero quickly.

**What are the four pillars that beginners should focus on when looking at tokenomics?**

When you evaluate whether a coin is worth buying, the core aspects to look at are these four pillars:

**① Supply**

The maximum supply determines scarcity. Is it only 21 million coins (like Bitcoin’s hard cap), or unlimited printing (like Dogecoin’s open issuance)? Rarity increases value; a capped total supply is usually more attractive.

Circulating supply is also crucial. How much of the total supply is currently in circulation? This directly relates to selling pressure later on. If a large portion of coins hasn’t been released yet, there could be significant pressure when they are unlocked.

**② Distribution and Lock-up**

How tokens are distributed best reveals the true intentions of the project team. How much does the team hold? How much do investors hold? How much is allocated to the community? When will each part be unlocked?