Tokenomics — token economics — refers to the supply structure, distribution, and inflation mechanics of a cryptocurrency. Understanding tokenomics is essential for evaluating the long-term viability of any token position, as poor tokenomics can produce inflation pressure that overwhelms even genuine demand growth.
Total supply vs. circulating supply
Total supply is the maximum number of tokens that can ever exist. Circulating supply is the number currently available for trading. The difference between the two — locked, vested, or not-yet-minted tokens — will eventually enter circulation and create sell pressure.
Fully diluted valuation (FDV) is the hypothetical market cap if all tokens were in circulation today. A token trading at a $100M market cap with 10% circulating supply has an FDV of $1 billion — meaning if all remaining tokens hit the market at current prices, the total value would be $1B.
Allocation categories
- Team allocation — tokens reserved for the development team; typically vested over 2–4 years to prevent immediate selling
- Investor/VC allocation — tokens sold to early investors, often at significant discounts to public price
- Ecosystem/treasury — tokens reserved for protocol development, grants, liquidity
- Public sale/fair launch — tokens available to the general public at launch
- Airdrop — tokens distributed to specific user segments
Vesting schedules
Vesting is the schedule on which locked tokens unlock and become tradeable. A typical team vesting might be: 12-month cliff (no tokens unlock for the first year), then linear release over 24 months (tokens unlock gradually over the following two years). When large unlocks approach (visible on tools like Token Unlocks), sell pressure can increase significantly.
Meme coin tokenomics
Most pump.fun meme coins have simple tokenomics: fixed total supply, no vesting, no team allocation beyond whatever the developer bought at launch. The key questions for meme coins are: (1) What did the developer buy at launch and do they still hold it? (2) Are there any large coordinated wallets that could dump? The standard tools (Bubblemaps, GMGN) are the primary instruments for assessing this.