Token Velocity
Plain English
How quickly tokens change hands. High velocity means tokens are spent/traded frequently rather than held. This can hurt token value since there’s less incentive to hold long-term. Good tokenomics encourage holding through staking or governance benefits.
Technical
Rate at which tokens circulate through the economy, measured as transaction volume divided by token supply. High velocity indicates tokens are primarily used as medium of exchange rather than store of value, potentially limiting price appreciation. Successful tokenomics implement velocity sinks: staking requirements, governance participation, or time-locked utility to encourage holding.