@haleem

Are you rewarding your users or token holders? This is a question projects find it hard to answer. Why? Because they don't factor it in and that's where they get in wrong. Why? The free rider problem. In economics, a free rider problem arises when individuals benefit from a resource or system without contributing to its cost or upkeep. In blockchain ecosystems, both token holders and users can become free riders but in different ways. 1. Token Holders Token holders often benefit from protocol growth through price appreciation, staking yields, or governance power without actively contributing to usage, liquidity, or ecosystem activity. Example. Token holders stake and collect rewards but don’t provide liquidity, build apps, or drive adoption. They benefit from users’ activity which raises token demand and fees but they’re not the ones creating it.

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