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

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.

Mastering Incentives. Interested in growth, products, football, sports, outdoors, biohacking, tokens (invest, design, incentives, value accrual)

Isn’t the difference of buyback & burn vs dividends mainly regulatory/tax optimization?

I don’t see a big difference.

Generally think buyback and burn is cleaner but users prefer to see their token holdings grow.

I do think it’s valuable to adjust parameters of revenue distribution towards growth or burn. If you figure out an incentive with cac < ltv, you should invest more into growth.

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