TOKENOMICS - It Can Make or Break Your ICO

Imagine you are the ruler of a small country. All residents of your country use the barter system to trade goods and services. Now you find barter to be a cumbersome process because of the following reason:

1. Double Coincidence of Wants - If citizen A wants to buy cloth, but produces wheat, then A needs to find someone who is doing the exact opposite. This need to find a corresponding party is called double coincidence of wants. This is undesirable to you as a ruler because it slows down to trade.

2. Proof of Goods - Unless A carries his bags of wheat to the marketplace, he will not be able to sell them in exchange for bales of cloth. This is also undesirable as it creates unnecessary cluttering of the marketplace and impedes trade as well.

So what do you do ?

If only there was a token that would serve the purpose of exhibiting a particular value.

Luckily, you are the ruler and you decree that you will be issuing "COINS" of various sizes denoting different values.

Now, A can buy cloth by simply paying using coins of the corresponding value. But the question arises, how do you go about distributing coins to your subjects.

You strike upon the idea of asking your subjects to dig canals for you, in exchange for which you will give the coins. Once a sufficient number of coins have reached the people, they started going back to their earlier professions and using the coins to trade. You can even give them a few coins to help them begin trading.

This is essentially Tokenomics.

The hows and why of implementing a token within an ecosystem such that people can use it to exchange goods and services in that ecosystem comprise are called "Tokenomics"

Coming to the Crypro-universe, tokens are the "Coins" of the ecosystem. Each company that builds a Blockchain-based product also build a token that can be used to facilitate tractions within the boundaries of their ecosystem.