Improving Community Distribution

There is no free lunch here. Things that are good for the network inflate the circulating supply, which may be bad for token holders. If you’re a token holder who operates in the network, that’s fine: you’re OK with dilution if it means a lower take on your economic activity. If you’re a purely financial investor, that’s not as great. The float of ... See more

By now it should be obvious that tokens aren’t a magic bullet — there are no shortcuts to building a network. Networks that just need passive participation from users can use tokens as one tactic to overcome the cold start problem. But networks with active participation can be harder to bootstrap. In these cases, token rewards can incentivize behav... See more

At a high level, the only way to address this problem is to link token incentives to network utility, i.e. ensure that users can only receive token incentives if they add value to the network. In other words, rewards need to be restricted to specific, desirable actions, not just adoption. 

Compounding: prevent harming treasury returns by giving away tokens at inopportune times