I support continuous discussions and improvements in tokenomics. Other than Bitcoin’s, there is no other precedence in the space that is “lindy” enough. We are at infancy and most of the space is still running experiments.
I do not believe that we will hit bulls eye in tokenomics at one shot but as long as we make leaps upon each attempt, we will be in the game.
I have read through the entire proposal and I am neither in support nor opposed to anything specific yet because I wish to see what PROFISH wants to bring to the table. What he has alluded to publicly so far is taking inspiration from Ethereum’s, which I am very interested to learn more about. After Bitcoin’s monetary policy, Ethereum’s post-merge token model (that involves burn) has created a winning narrative in the market, and I am very curious if that would fit Pocket.
Having said that-
Here is what I suggest we don’t do:
- Oversimplify this and “brand” it as “fixed supply” roadmap or something. Here are the reasons:
a) The less an asset does, the more relevant is it’s fixed supply- Gold, Bitcoin, Punks, dickbutts, etc. Fixed supply isn’t as relevant for assets with max utility- dollar, stocks, utility tokens.
b) Fixed supply (with no rhyme or reason) reflects sloppiness and weakness in token design, and a shortcut to “number go up”. Let us check ANKR: ANKR Tokenomics – Ankr ; its tokenomics page is literally a joke.
As a result, such tokens will attract speculative retail and detract well-capitalised and long-term sophisticated buyers/investors.
c) We should distance ourselves from over-branding fixed supply. If that’s the residual outcome of the tokenomics done right, so be it. But that shouldn’t be the goal by itself and neither should be branded and hyped.
- Any attempt to calculate price impact (do price predictions) due to future changes in tokenomics is completely futile, and I strongly suggest to not waste time there and/or have that influence decisions. Price is a function of supply and demand but it’s not that simple and consists of many variables. Supply can still be assumed but any demand assumption will be full of personal biases.
- Over complication: The underlying tokenomics shouldn’t be over-simplified as stated above but at the same time it shouldn’t be so complicated that nobody but only the creators understand.
“We are complicated” or “Pocket is complicated” mindset isn’t going to get us the top mind and market share.
What we should do-
- Economics is one of the 4 that tokenomics should address, the other 3 are: Distribution, Utility and Governance.
- And then design a system considering the above that is a) fair, b) transparent, and c) aligned with the long-term mission and values of Pocket.
- Create a project team involving relevant stakeholders and tackle this as one big “qualified” team instead of working in silos.
- Bull and bear market matters in this. We could do this in phases. 2023 or at least H1 2023 is fair to be assumed as continuation of bear market. End of 2023/2024 onwards could be assumed as start of bull market. We could prevent further degradation of token value (not necessarily appreciation) in the remaining bear market by “making some progress”, and that could mean:
a) debunking myths in the market such as POKT is a hyper-inflationary rebase token,
b) driving the narrative that an overhaul in tokenomics is coming, and/or
c) executing temporary burns
This will buy us necessary time and maybe give us few useful data point to launch the new robust version at the start of the bull market. The timing will be perfect.
We shouldn’t rush to the end, that would be fatal.