

Stuck scratching your head when it comes to tokenomics? Binance Research dove deep into the topic, exploring both the supply and demand dynamics.

Understanding tokenomics is crucial — understanding what makes good tokenomics even more so, be it for designing your own token structure or helping spot projects with strong fundamentals.
In a published report from Summer 2022, the Binance Research team defines tokenomics as the study of determining and evaluating the economic characteristics of a cryptographic token.
Key aspects of the token supply to consider are allocation, vesting period, and emission. In the report, the team deep-dives into all three of these topics.
They find that Layer 1s have seen public sales token allocations go down in favor of higher allocations towards ecosystem incentives in recent years and that vesting periods and cliff lengths have generally increased over the last couple of years. Interestingly, traditional technology companies appear to be taking the opposite route.
Figure 1: L1s have seen public sales allocations down in favor of higher allocations toward ecosystem incentives

Exploring case studies on high FDV/low market capitalization tokens and high DeFi APRs, the team notes the importance of understanding burn mechanisms and emission schedules of tokens.
“With increasing demand and a shrinking supply, the scarcity created and the resulting benefit to stakeholders by token burns is unquestionable”
On the demand side, the team emphasized that still, too many protocols pay too little attention to the incentive function of the token and token utility. For the team, trust plays an essential role in the utility of tokens as they define tokenization as a form of digitalization of value.
Figure 2: Token Utility- A token can have multiple purposes that bring utility to the token

Tokens can take various use cases, bringing utility to crypto projects. The six roles defined above each have their own purpose and features.
- Right: Tokens can give the right to engage with a protocol. This can come in multiple forms. Governance is the most common one, allowing for proposing changes and voting on the directionality of a project. They can further give access to a protocol and allow for product usage or offer ownership
- Value Exchange: The usage of tokens can lead to the creation of “mini” economies. Within this, tokens can facilitate the creation and the existence of economies by allowing for buying and selling as well as rewards for work and commitment
- Toll: Tokens lead to participants, investors, and users having skin in the game. Oftentimes, security deposits or usage fees can help to create a barrier to entry when running a smart contract platform or protocol
- Function: Tokens can frequently enrich a user experience by allowing them to join a network, participate in a game, connect with users and other participants, and can even incentivize them to participate
- Currency: Be it with a game or a DeFi protocol: oftentimes, a token can function as a form of currency by being a store of value and a medium of exchange
- Earnings: Protocols share their earnings through token incentives and distribute benefits to participants of a protocol. This can help to foster the growth and development of an ecosystem
Binance Research also looked beyond supply and demand and evaluated the two-token model, and further explored the importance of a solid product when thinking about tokens. A two-token model provides two different tokens at the same time. This, in return, helps to specialize the use cases for each of the two tokens by separating the “ecosystem” from a purpose-solving token.
Binance Research believes that in the “long-run good projects with strong fundamentals and product-market fit will always win over those with bad fundamentals”
Want to read the complete insights from the report and deep-dive into tokenomics? Find the full report here.
This is a guest post from CoinMarketCap by Stefan Piech, Macro Research at Binance, and has been edited for style. The original article was published here.
What is Binance Research:
Binance Research is the research arm of Binance, the world's leading cryptocurrency exchange. The team is committed to delivering objective, independent, and comprehensive analysis and aims to be the thought leader in the crypto space. Our analysts publish insightful thought pieces regularly on topics related but not limited to, the crypto ecosystem, blockchain technologies, and the latest market themes.
Find more about Binance Research here:
Website | Twitter | Telegram |
What is CoinMarketCap:
CoinMarketCap is the world's most-referenced price-tracking website for digital assets in the rapidly growing cryptocurrency space. Its mission is to make crypto discoverable and efficient globally by empowering retail users with unbiased, high-quality, and accurate information for drawing their own informed conclusions.
Where to find CoinMarketCap:
Website | Twitter | Telegram | LinkedIn |
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $1500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
Author
Related News

'Floktober' marks the beginning of the year's final quarter, and FLOKI's community may be expecting some significant announcements to emerge...
Unlocking the Exciting Potential of October for Floki
Certain moments stand out as pivotal junctures in the world of cryptocurrencies. For the Floki community, one such moment is the arrival of October, affectionately dubbed "Floktober." It is a name born from the collective enthusiasm of Floki's community.
This is the start of the year's final quarter, and some significant Floki-themed announcements may be on the horizon.
A Glimpse into Floki's Roadmap
Behind this excitement lies a compelling reason: many major milestones on Floki's roadmap are nearing fruition.
#FLOKI 2023 ROADMAP UPDATE
— FLOKI (@RealFlokiInu) June 22, 2023
We are VERY CLOSE to delivering on several key promises on the $FLOKI 2023 roadmap, so we believe an update is long overdue to show where we are at.
Here is a quick overview of some of the exciting things our devs are working on behind the scenes that… pic.twitter.com/EjGj284jCk
These impending developments encompass a spectrum of significant initiatives, including staking, a noteworthy upgrade for the FlokiFi Locker, introducing a mysterious protocol named Project TL, and the eagerly awaited mainnet launch of Valhalla, Floki's groundbreaking metaverse game.
FLOKTOBER! ⏳⏰🔥
— B (Da Viking) (@100bviking) September 22, 2023
"B," a prominent member of Floki's core team, has provided insights into the heightened anticipation within the community.
“October has historically been a good month for crypto. Even more so for Floki! So much so that our community has named the month of October "Floktober". This is generally used to refer to the good vibes and positive news that tend to come in for Floki in the month of October,” 'B', a core team member at Floki, told BSC News. “I don't think this October will be different. Our team has been working extra hard for a long time now, and I believe starting in October and leading to the end of the year, we can finally start showing what we've been working on!”
Lets delve into the updates that may soon emerge:
FlokiFi Locker: A Key Upgrade on the Horizon
FlokiFi Locker, the digital asset locker protocol introduced by the Floki team, is set to undergo a significant upgrade. This versatile platform allows users to securely lock various assets, including Liquidity Pool (LP) tokens, fungible tokens, NFTs, and multi tokens, reducing the the risk of a rug.
Currently, FlokiFi boasts an impressive $8.77 million worth of assets locked, accompanied by 72 NFTs. Prominent projects like ApeSwap, Biswap, and Chainlink have already chosen to collaborate with Floki for FlokiFi Locker. The community might anticipate a crucial upgrade announcement in the fourth quarter of this year.
Project TL: A Mystery Waiting to Unfold
Another development ostensibly on the horizon is the unveiling of Project TL. At this point, the details surrounding Project TL remain hidden in mystery, leaving the community in eager anticipation. Followers hope for more information to emerge as the days unfold, shedding light on this unknown project's purpose and potential impact.
Valhalla Metaverse Game Release: A Gaming Revolution
In gaming, Floki's Valhalla metaverse game is generating considerable excitement. Set to be released in Q4 2023, Valhalla represents a play-to-earn NFT gaming metaverse, combining blockchain technology and immersive gaming experiences.
Valhalla rewards players not only with $FLOKI for their in-game battles but also with complete ownership of in-game assets, which they can freely trade on platforms like FlokiPlaces. This metaverse game, powered by the FLOKI token, reportedly incorporates A-level game mechanics on the blockchain. This includes on-chain gaming interactions and upgradeable NFTs.
As Floktober approaches, the Floki community eagerly awaits these upcoming events, each carrying the potential to shape the future of Floki.
Floktober's Potential
Floki has sought to turn "Floktober" into a beacon of innovation and anticipation each year. Over recent times, the organization has utilized October as a canvas for its marketing endeavors, calling it "Floktober."
One of the boldest strokes in Floki's marketing palette was witnessed in October 2021. The cryptocurrency embarked on an audacious journey, commandeering 300 iconic London red city buses and adorning The Tube Underground with its branding for the entire month.
With this, Floki harbors a vision of broader mainstream exposure, with the ultimate goal of being embraced by a more extensive and diverse user base.
A Macro Support Zone: Insights from Crypto Tony
Crypto analyst Crypto Tony provides valuable perspective on Floki's current positioning. With an observation that "FLOKI is sat on a macro support zone," there is a sense of stability and resilience underpinning the cryptocurrency.
$FLOKI / @RealFlokiInu - Update #Flokitober is around the corner, and with $DOGE looking hot for a pump, well i expect some magic from the leaders
— Crypto Tony (@CryptoTony__) September 27, 2023
Also note that #FLOKI is sat on a macro support zone. Accumulation time legends pic.twitter.com/XVNrkXoIo1
As we venture deeper into Floktober, the Floki community remains poised for what promises to be an exciting chapter in the cryptocurrency's narrative.
Floki's ability to transform October into a month of celebration, innovation, and strategic advancement is characteristic of its so far dynamic approach to the world of cryptocurrency. With each passing Floktober, the Floki community and its supporters eagerly anticipate the revelations and developments that will shape the Floki ecosystem.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $1500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
This is a paid press release, BSC.News does not endorse and is not responsible for or liable for any content, accuracy, quality, advertising, products, or other materials on this page. The project team has purchased this advertisement article for $2500. Readers should do their own research before taking any actions related to the company. BSC.News is not responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods, or services mentioned in the press release.
Follow us on Twitter and Instagram!
If you need tools and strategies regarding safety and crypto education, be sure to check out the Tutorials, cryptonomics explainers, and Trading Tool Kits from BSC News.
Looking for a job in crypto? Check out the CryptoJobsNow listings!
Author

Try Now!

Sign up Now
Coming Soon

WIN BIG

Coming Soon

Sign Up Now

Earn Now
Coming Soon

Sign Up Now

Play & Mine!
Coming Soon
Editors Choice
Other Currencies
- nameLTBuyLitecoin
Sponsored
Buy Crypto with Fees as low as 0%
Buy Crypto with a bank transfer, credit or debit card, P2P exchange, and more. Not investment advice. All trading risk. Terms apply.
£0£0+0% - nameLTBuyEOS
Sponsored
Buy Crypto with Fees as low as 0%
Buy Crypto with a bank transfer, credit or debit card, P2P exchange, and more. Not investment advice. All trading risk. Terms apply.
£0£0+0% - nameLTBuyMonero
Sponsored
Buy Crypto with Fees as low as 0%
Buy Crypto with a bank transfer, credit or debit card, P2P exchange, and more. Not investment advice. All trading risk. Terms apply.
£0£0+0% - nameLTBuyBitcoin Cash
Sponsored
Buy Crypto with Fees as low as 0%
Buy Crypto with a bank transfer, credit or debit card, P2P exchange, and more. Not investment advice. All trading risk. Terms apply.
£0£0+0%