The #1 Warning Sign Before You Buy an Altcoin: Check the Tokenomics!
Stop buying coins just because the price is pumping! You need to look under the hood. The difference between a long-term winner like $ETH and a pump-and-dump is often a coin's Tokenomics—how the supply is managed.
What are Tokenomics? (The Supply Rules)
It's simply the economics of a crypto token. You must answer these three questions before you invest:
Supply Cap: What is the maximum number of coins that will ever exist? (Like $BTC's \text{21 Million} cap). A huge or unlimited cap can mean constant inflation, which is bad for price.
Allocation: Where did the tokens go initially?
Good Sign: Most tokens allocated to the community, staking rewards, or ecosystem development.
Bad Sign: Too many tokens (say, >30\%) are held by the founders, venture capitalists (VCs), or the core team. They can dump these later.
Vesting Schedule (The Dump Date): When do those founder/VC tokens unlock?
If a large chunk of tokens is scheduled to unlock next month, a massive sell-off (a "token dump") is likely to happen, crushing the price. You need to know this date!
Always check the project's official documentation or explorer. If the supply and allocation are too confusing or hidden, that's your biggest red flag.
What project has the best Tokenomics you've ever seen? Share below! 👇
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