Not all cryptocurrencies survive. In fact, over 88% of tokens launched since 2020 have vanished. Why? Often, it’s not because the tech failed - it’s because the tokenomics failed. Tokenomics is just the economics behind the token: how it’s made, how it’s given out, how it gains value, and how it stays valuable. Good tokenomics doesn’t just look pretty on a whitepaper. It creates real, lasting demand. Here are the real examples that prove it.
Ethereum: The Deflationary Benchmark
Ethereum didn’t start as a deflationary asset. But in August 2021, EIP-1559 changed everything. Instead of miners keeping all transaction fees, most of them got burned - permanently removed from circulation. As of October 2025, over 4.1 million ETH have been burned. That’s $12.8 billion worth of supply erased. The result? Ethereum’s circulating supply has dropped for 32 consecutive months. It’s the only major crypto with a net-negative supply growth rate.
But burning alone isn’t enough. Ethereum’s real strength is utility. Over 4,852 DeFi protocols rely on it. That means every time someone swaps tokens, stakes ETH, or trades NFTs on Ethereum, they’re using the network - and burning ETH in the process. This creates a loop: more usage → more burns → less supply → higher scarcity → more demand. That’s why Messari gives Ethereum a 92/100 tokenomics score - the highest in the industry.
BNB: Predictable Burns That Build Trust
Binance Coin (BNB) is the poster child for predictable tokenomics. Every quarter, Binance uses 20% of its profits to buy back and burn BNB tokens. As of July 15, 2025, they’ve burned 20.6 million BNB - reducing the total supply from 200 million to just under 129 million. That’s a 35.6% reduction since launch.
What makes this work? Transparency. You can watch every burn happen in real time on Binance’s public ledger. No guesswork. No hidden delays. Reddit users noticed this. One top comment from September 2025 said: "The predictability of BNB burns makes it one of the few tokens where supply reduction is transparent and verifiable." That’s not marketing - that’s trust. Binance didn’t just create a token. They created a contract with holders: "We’ll keep reducing supply as long as we make money."
And it shows. BNB’s tokenomics score of 85/100 from Messari reflects how rare this level of reliability is. Most tokens claim "burns" - but only BNB delivers them on schedule, every time.
Avalanche: Triple Burn Mechanism
Avalanche (AVAX) doesn’t just burn tokens from transaction fees. It burns them three ways:
- Gas fees paid to validators get burned
- Creating a subnet (a custom blockchain) burns AVAX
- Staking to secure the network locks AVAX - effectively removing it from circulation
Since its 2020 launch, 36% of the total AVAX supply has been burned. That’s over 259 million tokens gone. The result? A steady 1.2% annual reduction in circulating supply - even as the network grows. CoinMarketCap confirms this trend continues into 2025.
Why does this matter? Most blockchains only burn one type of fee. Avalanche turns every interaction - whether you’re building a chain, staking, or swapping - into a deflationary event. Dr. Garrick Hileman of Blockchain.com called this model "significantly more sustainable" than artificial scarcity. It’s not about making tokens rare. It’s about making every action on the network reduce supply. That’s tokenomics done right.
Hyperliquid: Community First Distribution
Most tokens are sold to VCs before public launch. Hyperliquid flipped that. In November 2024, they launched HYPE with 1 billion tokens - and gave 76.3% (763 million) directly to users via airdrops. Only 12% went to the team. 11.7% went to ecosystem growth. No venture capital rounds. No private sales.
This isn’t charity. It’s strategy. By giving tokens to actual users - not investors - they aligned incentives from day one. People who hold HYPE are also traders on the platform. Their success depends on the platform’s growth. So they use it, stake it, and defend it. No pump-and-dump. No whale dumping on retail.
Compare that to projects where 40-70% of supply goes to insiders. In September 2024, one such project collapsed after team tokens unlocked - losing 98% of its value in 3 months. Hyperliquid’s model avoids that entirely. Their transparency report confirmed the distribution. And users noticed. Within 48 hours of launch, HYPE had over 200,000 active wallets - mostly individuals, not institutions.
Solana: High Throughput, High Risk
Solana (SOL) has one of the most powerful blockchains. It handles 65,000 transactions per second at $0.00025 per fee. That’s cheaper than PayPal. And it’s why memecoins exploded on Solana - over 1.2 billion monthly transactions as of Q2 2025.
But its tokenomics? Messy. SOL has a max supply of 555 million. Annual inflation started at 8% and is slowly dropping to 1.5%. But as of October 2025, it’s still at 5.1%. That means new SOL is being created faster than demand can absorb it. Critics point out this dilutes long-term holders - estimated at $1.2 billion in value lost since launch due to inflation.
And then there’s concentration. 42.7% of SOL is held by the foundation and early investors. That’s a huge risk. If they sell, the price crashes. That’s why Solana scores 80/100 - high for utility, low for fairness.
But here’s the twist: Solana’s community is pushing a "SOL 2.0" upgrade. Scheduled for November 2025, it plans to cut inflation to 3.5% and start burning transaction fees. If it passes, Solana’s tokenomics could jump into the top tier. Right now, it’s a gamble - but a smart one.
What Makes Tokenomics "Good"?
After looking at these examples, a pattern emerges. Good tokenomics isn’t about flashy numbers. It’s about:
- Supply control - burns, caps, or controlled inflation. No unlimited printing.
- Utility-driven demand - the token must be needed to use the product, not just speculated on.
- Transparent distribution - team allocations under 15%, no hidden VCs, public vesting schedules.
- Verifiable burns - you can check the burns yourself. No "we burned tokens" without proof.
- Incentive alignment - the people who hold the token should benefit when the network grows.
Projects that get this right - like Ethereum, BNB, and Avalanche - survive bear markets. Those that don’t - the ones with 50% team allocations and no burns - vanish within months.
How to Check Tokenomics Yourself
You don’t need a PhD to spot bad tokenomics. Here’s how to do it in 5 minutes:
- Go to CoinGecko or CoinMarketCap. Look at the "Supply" section. Is there a max supply? Or is it "uncapped"? (Red flag.)
- Check the "Distribution" tab. Is more than 15% going to the team? If yes, dig deeper.
- Search for "burn" + the token name. Does the project have a public burn tracker? (Ethereum, BNB, and AVAX all do.)
- Ask: "What does this token actually DO?" If the answer is "it’s for staking" or "it’s for governance," that’s weak. If it’s "you need it to pay for transactions, create subnets, or access services," that’s strong.
- Check Reddit or Twitter. Are users complaining about inflation? Or praising burns? Real user feedback beats marketing.
Most tokens fail because they’re built for speculation. The good ones? They’re built to be used. And that’s the difference between a flash in the pan and a lasting asset.
What is tokenomics in crypto?
Tokenomics is the economic system behind a cryptocurrency token. It includes how many tokens exist, how they’re distributed, how they gain value, and how their supply changes over time. Good tokenomics creates real demand through utility, not just hype.
Why do most crypto tokens fail?
Most fail because their tokenomics is designed for short-term speculation, not long-term use. High team allocations, no supply controls, no real utility, and unverifiable burns lead to price crashes when insiders sell or demand dries up. Projects with transparent, utility-driven models survive.
Is burning tokens good for a crypto?
Yes - if it’s tied to real activity. Burning tokens that come from transaction fees or protocol revenue (like Ethereum or BNB) reduces supply and increases scarcity. But burning tokens that aren’t tied to usage - like random burns from a marketing budget - is just theater. Real burns come from users, not developers.
What’s the best tokenomics model?
There’s no single "best" model, but the strongest ones combine controlled supply (burns or caps), low team allocation (under 15%), and high utility. Ethereum’s deflationary burn + DeFi utility, BNB’s predictable quarterly burns, and Avalanche’s triple-burn system are currently the top performers.
Can a token with high inflation still succeed?
Only if demand grows faster than supply. Solana had high inflation but massive transaction volume - enough to offset dilution. But that’s rare. Most tokens with high inflation and low usage see their value erode. Sustainable models balance inflation with real, growing demand.
