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Tokenomics explained
“Tokenomics” describes how a token's supply is created, distributed and changed over time. Meme-coin landing pages often reduce it to three slogans — a big total supply, “0% tax” and “liquidity burned”. Here is what those terms actually mean.
Key terms
- Total supply
- The number of tokens that exist. A huge number like hundreds of millions or billions makes each token cheap but says nothing about value.
- Circulating supply
- Tokens actually available to trade, excluding locked or team allocations.
- Transaction tax
- A fee taken on each buy or sell, sometimes redirected to a team wallet. “0% tax” claims should be checked in the contract.
- Liquidity pool
- Tokens and a paired asset deposited so that trades can happen on decentralised exchanges.
- Burned liquidity
- Liquidity-provider tokens sent to an unusable address, so the pool cannot easily be withdrawn by the creator.
- Vesting
- A schedule that releases team or investor tokens gradually rather than all at once.
- Mint authority
- On Solana, the right to create new tokens. If it is not revoked, supply can be increased.
Why it matters
Concentrated holdings, active mint authority or unlocked team wallets increase the risk of sudden price collapses. Tokenomics cannot make a token valuable; it can only make some risks more or less visible.
Educational content. Not investment advice.