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Intermediate 7 min read

Tokenomics

Supply, burns, buybacks — how token design creates (or destroys) value.

1Every token is designed

Supply in circulation, team allocations, revenue used for buybacks and burns (deleting tokens from existence), product usage — these choices decide whether a token has fundamental reasons to rise or is pure attention. Utility coins like the big perp-exchange tokens route real trading fees into buybacks; that's a machine under the price.

2Comparable valuation

One of the easiest real edges: compare a new token to the market leader in the same narrative. When a giant exchange launched a competitor to the biggest DEX and its token traded 120x cheaper on day one, that one-line comparison was the entire trade. The easier an undervaluation is to explain in one sentence, the faster the crowd buys it.

3Match the logic to the coin

A meme coin trader applying ownership-coin logic holds too long. An investor applying meme-coin logic sells winners too early. Before entering, ask: what type of coin is this, and which variables actually drive its price?

Learning material summarized from the free "A Complete (Meme)Coin Guide" by @spyzer — shared with full credit.

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