General

Token Economy

The broader economic ecosystem around AI tokens including pricing models, cost optimization strategies, and the financial dynamics of building AI-powered products.

Why It Matters

Token economics determine whether AI products are profitable. Understanding cost per query, revenue per user, and optimization levers is essential for AI product managers.

Example

An AI startup calculating that each customer query costs $0.03 in tokens, they need 1,000 queries/user/month to justify the $50 subscription, and caching reduces costs by 40%.

Think of it like...

Like the unit economics of any business — you need to understand the cost of each transaction and ensure revenue per customer exceeds costs at scale.

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