Definition: tokenomics

(1) (TOKEN econOMICS) For AI, tokenomics are the financial incentives for employing it. Tokenomics takes the cost of AI software and subtracts the savings in computer and human time that is derived from running AI models and agents. The "token" part of the term relates to the way data are turned into tokens for training AI models and has no relationship to the same term in the crypto world. See AI token.

(2) (TOKEN econOMICS) For crypto, tokenomics are the incentives for using a cryptocurrency protocol. Tokens are issued for governance, allowing holders to participate in policy; the more tokens, the more voting clout. To increase wealth, tokens are used for speculation and yield, but tokens may be offered to incentivize people for any purpose. For example, the Braintrust talent network issues tokens for referring workers (see Braintrust). See token and crypto glossary.