from one of my posts above:
Regarding inflation, the total number of coins distributed over a set period of time does not affect the scarcity of an asset . In this regard, When viewed from outside the system there is no difference between 50K YFI distributed over 5 years and 300K or 1Million YFI distributed over the same time period. The only thing that changes is the distribution of who has the tokens within the system.
I will go further and say that you can even change the timeframe in which those tokens are distributed and it does not change the value of all the tokens combined. It is a fallacy that the supply side of this equation will drive value to the project as a whole. It won’t. The value comes from the utility of the token. The utility of the token comes from revenues generated by yEarn. Nothing else. No scarcity meme will drive long term value to the project unless you can be sure that you have the only scarce product. Anything else is a race to the bottom since the moment a competitor comes out they can have a lower supply. The supply literally does not matter beyond making memes.
Bitcoin may be the only thing that can pull this off as it tries to incept an idea of the value of it’s own scarcity into the world. But in the end, if people don’t use Bitcoin it will not be valuable, whether it has 21 million supply or 21 supply. and yEarn is not Bitcoin.
Inflation is an ongoing process. It is a continual process that is a characteristic of an economy that has to do with an expanding money supply as well as costs of goods and services becoming cheaper. What we are talking about is NOT inflation. Lets call it what it is: Dilution
I am arguing for more Dilution of the supply of YFI than what is currently proposed. I fully understand that I am pushing a boulder up a mountain because this is crypto and no one wants to see “number go down.” But lets be clear, beyond potentially driving interest in the project, more or less issuance does not increase, nor decrease the value of YFI in aggregate or the yEarn product. Again, the total supply does not matter because, extrinsic of other factors, it does not change the amount of revenue that YFI generates.
I am very aware that continually diluting holders of the YFI token is not a good or sustainable option. I am not arguing to continually dilute YFI holders, but I am arguing that we should choose to dilute ourselves now, and for a limited period because it is better for the long term health of the project. After this first dilution, there will be no more dilution. Everyone will know where they stand and people will be able to confidently asses how much of the ecosystem they own.
Why do I think that diluting ourselves is the correct choice? Because crypto is built on an ethos that everyone should have an opportunity to participate and because not doing so will look like governance capture and greed. We have an opportunity to be altruistic put long term goals and goodwill with the crypto community ahead of short term gain, and that is valuable.
I do not think that this should be a charity and understand that it is not a democracy (although to avoid capture the voting mechanisms should be carefully considered). Nothing I am proposing is charity and no one is getting anything for nothing.
troll away.
