@justinzhang
Faucets and Sinks
* Faucets expand the network effect; sinks defend it.
* Faucets should directly incentivize the core metrics, not proxies. Subsidizing proxies may lead to wasting resources as they’re easily faked.
* Never subsidize demand; it creates low-quality growth. Subsidize supply through verified mechanisms, such as staking or using web2 identities.
* Sinks should preserve the token’s value and be linked to value creation events. Avoid simplistic sinks like buy-and-burn during the early stages when all resources should be spent on strengthening the network effect.
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