Tokenomist experts compared the characteristics of utility and meme tokens
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Johny Smith
2024/10/24
3 mins read
Researchers at Tokenomist (formerly Token Unlocks) examined the differences between several classes of cryptocurrencies. In particular, in their latest report, experts compared the Utility and Meme tokens. Experts noted that these types of cryptocurrency assets play completely different roles in the digital coin ecosystem. Their price dynamics strongly depend on the supply structure.
Experts highlighted that Utility assets, such as utility tokens for projects in the decentralized finance (DeFi) sector, mainly use controlled issuance and distribution mechanisms (locking assets for staking or burning part of the supply to reduce inflation and increase value). However, they are also subject to the risks of sudden resets when the vesting (unlocking) periods of large tokens end. This can significantly affect their price and carries certain risks for investors and asset holders.
Meme tokens, on the other hand, rely more on demand generated by public interest. Analysts say these digital assets often suffer from poor supply management, which can lead to extremely high volatility and sharp price crashes if cryptocurrencies are sold en masse by large holders, or whales.
Analyzing the two types of tokens, the researchers note: Utility tokens have more structured supply control mechanisms, which makes them more predictable for investors. Meme tokens are more volatile, but can provide interesting opportunities in the form of significant short-term profits amid the hype around them. Investors need to understand the fundamental differences in these tokenomics and choose their own strategies based on their level of risk and time horizon.
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