🚀 What Is Tokenomics?
Tokenomics = Token + Economics.
It defines how tokens are created, distributed, and used in a crypto project.
Good tokenomics ensures fairness and sustainability.
Bad tokenomics is often the first red flag of a potential rugpull.
🧩 1️⃣ Allocation: Who Gets What
How tokens are distributed shows where power lies.
A risky setup:
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Team: 50%
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Investors: 40%
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Community: 10%
This means only 10% of tokens are held by real users, while insiders control the price.
✅ A healthier model:
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Team: 15–20%
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Investors: 20–30%
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Community & Rewards: 50%+
⏳ 2️⃣ Vesting: Lock Periods Build Trust
Vesting means tokens unlock gradually instead of all at once.
Projects with no vesting allow insiders to dump immediately after launch.
Example:
If team tokens unlock over 12–24 months, it shows commitment.
But if all tokens are unlocked on day 1, that’s a huge rugpull risk.
🎯 3️⃣ Incentives: Why People Hold
Sustainable projects design incentives that encourage long-term participation:
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Staking rewards
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Governance voting power
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Revenue sharing
Unsustainable ones offer insane APY (1000%+), forcing new money to pay old investors — a Ponzi-like setup.
💀 Real Example: Squid Game Token (2021)
It had no vesting, no clear allocation, and no sell function for holders.
The price went from $0.01 → $2,800 → $0 in minutes.
Perfect example of bad tokenomics enabling a rugpull.
🧭 How to Protect Yourself
✅ Read the whitepaper — focus on token allocation and vesting details.
✅ Use sites like RugScamAlert.com to verify distribution fairness.
✅ Avoid projects where team or investors hold most of the supply.
