crypto

Every network token should have an economic model, including the collection of fees that can be used for token buybacks.

This helps sustain the value of the token, which can be continuously issued to pay for the growth or operation of the network's marketplace (SOL, ETH, UNI are all examples).

CTO @a16zcrypto, lover of https://github.com/a16z/awesome-farcaster

Working on building zkTLS infra/products. A ruthless empiricist and meme connoisseur.

/opacity
/eulerlagrange

The thing in common here isn’t “scarcity” per se but that each of these are decentralized network-marketplaces and on the right you are listing the goods they are selling.

All network tokens are integral to a (decentralized) network (marketplace).

Does there always need to be a scarce/limited resource associated with a token?

SOL/ETH -> Blockspace 
Uni -> Liquidity
Helium -> Coverage
Daylight -> Energy

No dividends — buybacks that burn tokens. And they don’t need to be turned on to start.

I do think $ETH could be an exception and break out of this revenue cycle by having enough additional utility/demand drivers as money in DeFi, l2s, apps (vs purely redistributing money from l1 fees). 

For all others (startups), I totally agree that they need better economic models, make revenues to invest in growth (incentives) and forward to holders (as dividends) - before they can also accrue some utility premium.

SOL, ETH, UNI… they don’t just grow they pay their way.