@Emil_K99 I’d say inflation was a player in the death spiral, but it wasn’t the driving force. Similarly, less inflation won’t solely rectify the token price.
The main hiccup, in my opinion, is market making. We’re seeing 610K POKT becoming liquid every day against a lukewarm demand. So, how do we revive POKT’s value? Here are two suggestions:
- Introduce a mechanism to gradually raise the average stake to $15k or 15000 POKT. Right now, we have 20700 nodes, 870M POKT staked, and 608M POKT liquid, averaging about $1600 per node. A new node costs $600 to stake and Lean Pocket reduced HW costs drastically, which ultimately means decreasing the token rarity.
Silly example: Let’s say the nodes agreed on a minimum $5000 stake. That would imply $103M worth of POKT staked, covering the entire token supply at a $0.07 price, eliminating all liquid POKT.
It may sound outlandish considering we can’t predict how many nodes would unstake or re-stake. But regardless of the outcome, the game theory principles apply. If half the nodes exited, the remaining would enjoy doubled rewards, drawing in new nodes.
- If I remember correctly, V1 is expected to integrate IBC, hopefully introducing official ERC-20. This would offer DeFi incentives to liquidity providers, encouraging more people to stake POKT and earn rewards.
Both strategies aim at reducing liquid tokens, driving token rarity in the long-run. It might spark a “FOMO” spiral—people buying tokens to stake for a good ROI, pushing the price and ROI up, and so forth. However when we last saw this, the network had nearly 50k staked nodes at the onset of the death spiral.