NeverKnower on Farcaster

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GM! @gmcoin mints $GM token for every "gm" tweet. Does it mean that there would be infinity tokens in time? No. Let me explain. We all understand that unlimited supply is bad. It never gives price ability to rise. But if we set hard cap - we interfer to a process of minting and distribution of tokens from the start. And we can do a mistake that breaks all tokenomics and future success of token. What to do then? Produce $GM token for every "gm" tweet, but increase difficulty over time. @gmcoin has epoch system. 1 epoch = 1 week. Every epoch minting difficulty recalculates. By default it increases by 30%. It means that every next epoch you would receive 30% less $GM tokens for the same tweet/like. it also means that at some point of time we will get a situation, where mints less then 1 $GM token per epoch per total. And practically it means that we reached hard cap of token. But what exact number it would be and when it would be - nobody knows (yes, we have some calculations, but it either not guarantee).

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Yes, that's nothing new, that's inspired by Bitcoin. But instead of 4 years we have 1-week epoch, instead of hardware minters we have GMers - "gm" minters! But, what is we had a mistake? Token price is derived from demand. If price per 1 $GM token would be too low, it can decrease demand a lot. Let's say you can receive 100$ per "gm" tweet, but in half a year you can receive only 0.01$ per tweet. People would loose interest, and that would lead to decreasing demand(and price) more, which leads to people loose interest even more.. well, you got it. Death spiral. Yes, we can try to solve it by incresing number of demand by involving more people into the GM, but at some point of time we would reach limits. Plus market conditions. Plus all other stuff that we cannot control. So, how to solve it from tokenomics side? Well, here we inspired by Ethereum dynamical inflationary/deflationary model.

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