Businesses can create a self-governed microeconomy on a decentralized network with their own currency or tokens.
In the past few years, most of these artificial economies or initial coin offerings have failed because creators didn’t study or analyze their tokenomics. Instead, there’s been a race to generate buzz and make quick money.
This hasn’t impressed investors, as the creators didn’t try to create a management strategy for their currencies. Speculation-based returns are too risky and unstable, which is why these currencies failed.
Below are the prominent reasons supporting the need for tokenomics:
Tokenomics can be challenging for many reasons. Some of these include: