For the past few cycles, lots of protocols and notable chains used “emissions” as a growth hack.
However, it’s becoming obvious that inflation without real usage and traction (in terms of protocol revenue) eventually kills every token model.
Curious what the community thinks:
• Are usage-driven models the future?
• Should mint/burn be algorithmic instead of discretionary?
Are emission-heavy tokenomics dead? Most protocols can’t survive their own inflation.
byu/sp_archer_007 inCryptoMarkets
Posted by sp_archer_007
3 Comments
Check XPL chart to answer this question
Oversimplifying a bit but:
Currency value = Total Value / Currency Supply.
Run away emissions will always be an issue as it’s the primary source of inflation. That’s true either way fiat & crypto alike.
If you are bullish longterm then this is acceptable. You are focused on accumulating an asset that you believe will increase in value later so growing shares or tokens will magnify the impact of anticipated future growth. That’s 100% fine and is akin to DRIP on steroids if we consider TradFi.
The issue is that many projects know from the beginning that they cannot last and use these tokenomics to milk their community dry while insiders sell.
It’s a ponzi-ish plan but reasonable as an early startup but unfortunately I think many of these projects know that they will never be sustainable and use advanced tokenomics to try to make a true ponzi sustainable and that simply cannot work long-term.
There is a reason why Satoshi limited the BTC supply