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CryptoPlaza🎩Ⓜ️💜 OG449 pfp
CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
Amazing debate ETHEREUM VS. SOLANA with @justindrake and Anatoly Yakovenko at @bankless . All of this is conducted by @rsa.eth and @trustlessstate. It's difficult to find a higher-level debate in Crypto. Many claims to break down. Let's try it https://www.youtube.com/watch?v=Rd_04vVLE-4&t=5081s
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CryptoPlaza🎩Ⓜ️💜 OG449 pfp
CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
Issuance is not a cost to the network Justin Drake. This is one of the most interesting debates in valuation topics in Crypto. Let me share my general thoughts about this topic https://mirror.xyz/0x3e0cf03f718520F30300266dcF4DB50bA12d3331/XngkYDwW7j-wHtHqvle_HNusXJbYC0mZh7B1-06V1z8
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
This initial statement is at the very least highly debatable. Firstly, because within a company's valuation, tax costs are considered since they determine the profit available to shareholders.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
In this sense, we can assert that part of the competitive advantage of blockchains is that they are not directly exposed to this business cost when they are fully decentralized.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
However, the tax cost associated with shareholders should not really be consolidated within the company's costs. Firstly, because it would be impossible to calculate the tax cost for each shareholder, some of whom may be in countries with very favorable tax regimes.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
But fundamentally because these taxes are not deducted from the profits that the company has, which it must then decide whether to reinvest or distribute to its shareholders.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
That issuance is direct sell pressure that is a cost to the network now Solana. Although we can agree that issuing new shares and distributing them has an impact by increasing the supply and thus putting pressure on the project's price, we cannot assert that this is a direct relationship.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
If the issuance of shares is done in exchange for resources for the company that even exceed the amount of that issuance, the effect would be the opposite.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
The investor or the provider (if the shares are given in exchange for a service) will always be able to sell them (in the case of the provider, this seems most likely since there is no initial interest in participating in the project's growth and thus becoming an investor).
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
But the price of those tokens will be related to their fundamental value in the long term.The tax obligation, which is transversal to all an investor's investments, does not necessarily have to be fulfilled with the same shares of each profitable investment
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
The investor could even take out loans to meet these obligations, using the tokens as collateral. In the case of large tax obligations, the reality is that global structures are often created to optimize that tax payment.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
It is debatable to think that a company that does not finance itself, meaning it does not issue tokens, can have a greater appreciation in its price.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
This does not align with reality, given that it is precisely the companies with more resources, low financing costs, and the ability to generate value that will experience the greatest appreciation.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
Therefore, the question should perhaps revolve around how this issuance is being carried out. The reality is that the direct costs associated with the project (i.e., the payment for physical infrastructures) do not increase due to this issuance.
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CryptoPlaza🎩Ⓜ️💜 OG449
@especulacion
Those expenses are really related to the use of the network. This issuance, when we talk about Proof of Stake, is essentially a dividend to shareholders who are more involved with the project. Since it is not possible to do staking without being a shareholder.
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