Educational Post:

What Is Tokenomics and Why Does It Matter?

Tokenomics is a term that captures a token’s economics. It describes the factors that impact a token’s use and value, including but not limited to the token’s creation and distribution, supply and demand, incentive mechanisms, and token burn schedules. For crypto projects, well-designed tokenomics is critical to success. Assessing a project’s tokenomics before deciding to participate is essential for investors and stakeholders.

Let’s look at bitcoin as an example. The total supply of bitcoin is pre-programmed to be 21 million coins. The way bitcoins are created and entered into circulation is by mining. Miners are given some bitcoins as a reward when a block is mined every 10 minutes or so. 

The reward, also called block subsidy, is halved every 210,000 blocks. By this schedule, a halving takes place every four years. Since January 3, 2009, when the first block, or the genesis block, was created on the Bitcoin network, the block subsidy has been halved three times from 50 BTC to 25 BTC, 12.5 BTC, and 6.25 BTC currently.

Based on these rules, it’s easy to calculate that around 328,500 bitcoins will be mined in 2022 by dividing the total number of minutes of the year by 10 (because a block is mined every 10 minutes) and then multiplying by 6.25 (because each block gives out 6.25 BTC as rewards). Therefore, the number of bitcoins mined each year can be predicted, and the last bitcoin is expected to be mined around the year 2140.

Key elements of Tokenomics

As a catch-all term for a wide range of factors influencing a cryptocurrency’s value, “tokenomics” refers first and foremost to the structure of a cryptocurrency’s economy as designed by its creators. Here are some of the most important factors to consider when looking at a cryptocurrency’s tokenomics. 

Token supply

Supply and demand are the primary factors impacting the price of any good or service. The same goes for crypto. There are several critical metrics measuring a token’s supply. 

Token Utility

Token utility refers to the use cases designed for a token. For example, BNB’s utility includes powering the BNB Chain, paying transaction fees and enjoying trading fee discounts on the BNB Chain, and serving as community utility token on the BNB Chain ecosystem. Users can also stake BNB with various products within the ecosystem to earn additional income.

Analysing token distribution 

Aside from supply and demand, it’s essential to look at how tokens are distributed. Large institutions and individual investors behave differently. Knowing what types of entities hold a token will give you insight into how they are likely to trade their tokens, which will in turn impact the token’s value. 

Tokenomics is a fundamental concept to understand if you want to get into crypto. It’s a term capturing the major factors affecting the value of a token. It’s important to note that no single factor provides a magical key. Your assessment should be based on as many factors as possible and analyzed as a whole. Tokenomics can be combined with other fundamental analysis tools to make an informed judgment on a project’s future prospects and its token’s price.

FIDA pumped to 2928, second target achieved. That is more than 34% profit from our entry. Hoping you booked some profit. Keep Earning 😊

FIDA USDT pair made a high of $0.6320, that is more than 35% profit from our entry. Keep booking profit and increase stop loss. Keep Earning 😊

FIO/BTC
FIO Protocol (FIO) is a blockchain protocol that aims to enable a better way of sending/receiving coins and tokens.

Technically lying above strong support. RSI is in the oversold region. MACD is showing bullish momentum. It will pump hard from here. so now is the right time to build your position in it before breakout for massive profits😊

Targets: 251-298-345-400 satoshi

FIO/USDT lying above strong support. Stochastic is giving a buying signal. It will bounce hard from here. so now is the right time to build your position in it before breakout for massive profits😊

Targets: $0.0542-0.0675-0.0875-0.1015

SL: $0.0421

GMT Analysis :

GMT is being making some LL and LH and now tested out the resistance zone $0.81 - $0.84. Price has turned short-term bullish and now price is expected back to test the build-up support around $0.69 - $0.71. A strong reaction is expected from there for a scalp move.

Bitcoin gave a fakeout above the resistance area. BTC is trying hard to break above the resistance area. Wait for a clear breakout above the resistance zone.

Notice of Removal of Trading Pairs - 2022-09-16

https://www.binance.com/en/support/announcement/96c8dc9145ff48069c932513f69c616a

TRX broke the falling wedge pattern and the resistance of $0.064 area. You can add long position near $0.064 area with tight stop loss. We may see upward move now.

VITE/BTC
Vite has built a Directed Acyclic Graph (DAG) based smart-contract platform, with a Snapshot Chain structure to facilitate zero-fee transactions and optimize transaction speed, reliability, and security.

Technically lying above strong support. RSI is in the oversold region. MACD is showing bullish momentum. It will pump hard from here. so now is the right time to build your position in it before breakout for massive profits😊

Targets: 142-185-240-300 satoshi

VITE/USDT lying above strong support. Stochastic is giving a buying signal. It will bounce hard from here. so now is the right time to build your position in it before breakout for massive profits😊

Targets: $0.03145-0.04275-0.05575-0.06785

SL: $0.02375

GAL Analysis: GAL analysis:

GAL has rejected from the resistance of the $3.20-$3.30 area. The local support is $2.80-$2.85 area and major support is $2.35-$2.42 area. We may see another test of the resistance area soon. You can build a long position near the local support area. The resistance levels are given on the chart.

Bitcoin closes the daily candle above the $21,800 level and this is a good sign. The next resistance is $22,800-$23,000 area. The support is $21,600-$21,800 area and the market is bullish above it.

Bitcoin dominance bounced from the support of 39.5-40% area. The next resistance is 42.10-42.40% area and 44% area. We may see some downward movement in the altcoin/BTC pair. Use tight stop loss in all trades.

GMT slowly moved lower and lower and nearly came towards thr support. Price made some equal loww which is liquidity buildup. The this support becomes high probable to enter.

Updates Regarding the Upcoming Ethereum Merge (2022-09-13)

https://www.binance.com/en/support/announcement/9a4805dffb8741a78f26075762a22a9c

MATIC analysis:

MATIC is trading in an uptrend channel on hourly time frame. There is local support of $0.843-$0.852 area and the uptrend line support is near $0.815 area. The resistance level remains the same.

Bitcoin was dumped because of the FED news. There is a rumor that FED will increase the interest rates by 100 points by next week. We may see some suppression in price till the news comes out. Use tight stop loss in all trades.

The TOTAL marketcap is rejected from the $1.15 trillion area. The uptrend line support is $900-$920 billion area. If the TOTAL cap broke the support line then we see a heavy downfall in the market.

Bitcoin hash rate hitting new all-time highs the week of ETH's transition to PoS is truly poetic.

FTT analysis:

FTT is now testing the support of the $25-$25.35 area. You can open a long position here with tight stop loss. The local resistance is $26.30-$26.45 area and the major resistance is $28.50-$29 area.