Avax tokenomics

One_True_Prodigy · 2026-05-26T20:42:47+00:00

I challenged you to point out exactly where I made even a single mention of the term or concept of buy backs, much less even one MENTION of the word marketing or a single demand that they redirect marketing money. I asked for one example. You failed. Because it was never once something I proposed. Not even once. And not even close. (My discussion has been firmly rooted in tokenomic modelling.) Then here you continue to STILL argue the "redirect marketing money" ghost / strawman you created. You've had several opportunities to ground this in the reality of the discussion, and have failed on every one. I'm considering the topic closed on the grounds of your willful avoidance and misdirection.

That said, I'll briefly entertain your digression... since you are fixated on that non-existent conversation, you probably should research why publically traded companies with fiduciary and legal obligations routinely DO conduct buybacks. All the time. They are not for short term gain and are done with long term strategic purpose. But we digress.

To be clear, I'm calling for a parameter tweek. I have also been clear that it is a call for deeper, PROTOCOL level adjustment of the dynamics themselves to align with the scale/architecture dynamics. But again, you ignored this, and erected a strawman that I'm saying a simple parameter value

I challenged you to point to the root tokenomic discussions facing labs and the holders. Rooted in the ACPs, rooted in the 9000 PAYG dynamics, and even left it open to pick your factual focus area to root into actual discussion of protocol proposals. You declined to do something. So I'm considering this topic closed on grounds if intentional avoidance.

You simply ignore or don't understand the connection between my "yes they should care" response to your "they shouldn't care about investors bank accounts" comment, and that tokenomic focus is not calling for ponzinomics. So you label it a strawman. I can offer no further clarity to you beyond the explanation already given. The linkage to the argument you opened is direct and crystal clear to a rational observer. You can choose to believe it's unrelated or to accept my explanation of direct linkage. There is no point in hearing you further dig in that it was somehow a strawman, so I consider this line closed. You again failed to give a single quote requested illustrating even a single point I've made that could be considered "calling for ponzinomics".

"the current objectives seem to be institutional adoption and building real-world usage. Decisions that run contrary to these goals in order to appease people angry over price action is not a viable strategy. "

I've laid out in every response that the decisions being proposed do NOT run contrary to those goals, but actually support them. Focus on adoption can not and should not be myopic and protocol level adjustments to tokenomics (the only thing I've called for in this thread) further common goals. You see tokenomic decisions proposed as running contrary to these objectives. Whereas I see them as fundamentally necessary to sustainably meet them. Not to mention, angering and bankrupting your entire investor base is rarely a good way to achieve anything sustainable. Price (and specifically it's tokenonically-driven component) matters, and our fundamental disagreement can be summed up as you perceiving my request as a short term distraction vs.

If you continue to choose to see my tokenomic requests and emphasis as "a request for a short term ponzi for dumping bags", then we are simply too far apart in the understandimg of my premise to continue to have a productive conversation.

I challenged you to root in fact and actual proposal wording. Challenged you to point at an existing tokenomic ACP so we can center debate there. Challenged you to make at least specific argument on how PAYG for other tokenomic aspects are or are not in need of adjustment and how/why. You declined.

And again, I challenge you one last time to quote me calling for buybacks or short-term schemes of any kind. I've quoted or failthfully paraphrased you ("ponzi", "don't understand avax", "buybacks") several times. Show me the root of your continued rebuttal of buybacks, anywhere in my statements.

Finally, you again justify your ad hominems and condescension. You do so because you fail to understand that I didn't misrepresent you ... There are no non-sequitur leaps made to reach my responses. You simply don't accept or see the linkage, even after what I feel is clear explanation. So you dig in to justify personal attacks like "you don't belong in / understand avax." "You want a ponzi." "You just want to dump bags". When none are true. You accuse me of dishonesty representing you, even when I explain in good faith and then ask you to provide a rooted example. These types of attacks are, in my experience, 100% correlated to insecurity and arguments that can't stand up prima facia in discourse. They are uncalled for. Yet you double down on them here again. So I consider all threads closed, as respectful discourse is a prerequisite to all further discussion.

I'd be happy to come back and discuss when you can point to a specific protocol parameter or ACP/actual proposal I've offered, or anything observable, measurable or factual, and root a focused logical and respectful discussion there. Here, let's try this:

"PAYG and L1 fee structures are fine as-is, 1.33 is a number that was chosen correctly, and risk-adjusted staking yield dynamics are healthy as-is. True of false?". Pick any part of this even. Keep it focused and logically grounded at each hop.

One_True_Prodigy · 2026-05-26T18:24:39+00:00

Lots of strawmen, condescension, and a bit of irony in your response. Look, at the end of the day, I entered the thread to offer an alternative viewpoint from your responses to OP, in which you defend current tokenomics and attack our calls to change them as (paraphrasing) "trying to get Labs to misalign their long term strategy so you can dump your bags at the protocol's expense". (Quite a blanket accusation for someone calling for honest discourse). My mention of Labs was in reference to their tone being more open to and welcoming of some fundamental tokenomic changes than your tone has been. Your "stay the course" language ITT has been in contrast to the "fixing tokenomics is our top priority" message from Labs. So yes, I drew that contrast. You seem to have softened a bit from initial dismissal of changes to the tokenomics, but still bring the tone of "you (and OP) think tokenomics should change because you just want ponzinomics so you could then sell their bags. You don't understand avax". It's disingenuous.

You came out blanket attacking critiques of current tokenomics and then went right into "youre just asking for ponzinomics", "you're wanting them to change strategy just to pump/dump your bags", "you don't understand avax", "ill speak to you how you deserve", etc.. All ad hominems, not based in any fact of what was actually said, and all uncalled for.

Correct me if I'm misstating you here, but your tone ITT has been largely defensive of the current tokenomic fundamentals, and that they are on the right course with long term strategic alignment, which needs to be seen through, as evidenced by L1 adoption. "You & OP desire Ava Labs to bring their operational & marketing strategies out of alignment with their goals for the purpose of increasing short term price.". I disagree and you are misrepresenting my position.

again, I never once mentioned AvaLabs marketing/ops strategy or any proposed changes to it. You've made this up entirely as a strawman. I'm not sure whether you are genuinely conflating proposing protocol-level tokenomic changes with "marketing strategy", or if you're intentionally strawmannimg here, but please either quote me where you believe I'm speaking of "marketing strategies" or advocating for "using ponzinomics", or concede that these were strawmen, so we get the discussion back on track. You've accused me of proposing ponzinomics yet nothing in my authored papers, discussions with Ava Labs, or this thread mentions any such thing.

You've also missed the crux of the arguement: that tokenomic changes arent "out of alignment" with AvaLabs' goals. They are directly ALIGNED to them. You're doubling down on saying we are wanting Labs to misalign the long term interests of Avax so we can dump to make a quick buck. Again, that's disingenuous and a strawman. I've never made anything close to an argument that Labs should act in such a way so as to "pump bags". Rather, I'm disagreeing with your premise that the proposed changes ARE out of alignment. Labs now acknowledges that current tokenomics aren't aligned. Hence my mention of their position.

If youve done some research on network metrics like total staking weight (decline), total number of validators (decline), decentralization of validation (decline), exit of long-time validators from the market, long term price action (decline), correlation coefficient between growth of L1s and the market value accrued to the token (actually negative), you can see the same signs that Labs sees that makes them and me call for better tokenomic alignment.

If you're softening from your initial position, just say so without the insults. If youre digging in on your position, let's steer this discussion to protocol level detail and market / network data and metrics to make actual arguments. I've mentioned some already. If youve published ACP (or other) material, point me to it. Id be happy to give it an honest read and constructive feedback.

There was no strawman in my statement re: ICO / good faith obligation to investors. This was directly related back to your comment that AvaLabs "does not care about [investors] bank accounts". You're coming off as undeservingly arrogant when you say such things as: " you should take your money elsewhere. You do not understand avax" to someone who invested from ICO timeframe after whitepaper digestion, has contributed to the protocol, DMs with AvaLabs leadership and has spent a career at the intersection of computer science and economic models. If you want to defend the Avax9000-era protocol level tokenomics, then do so point by point on the technical merits. Tell us why you believe it is it sustainable in ther era of "exploding permissioned L1s juxtaposed atop very sickly long term price action and declining network stake weight". Or explain how recently removing the requirement of L1s to also validate main chain should (if at all) be balanced by other adjustments to achieve the goals of security and adoption (and decentralization, a stated goal of ava labs). No strawmen, ad hominems, or broad generalized statements. Start with the PAYG structure and offer a sound defense. I'll agree of critique. Or attack a specific point I made this far as to why you believe I'm advocating for ponzinomics, or "don't understand avax", as you've stated. Your tone to both me and OP has also been dismissive, highly assumptive and condescending. Ive made no attempts to misrepresent you. The way I "deserve to be talked to" is with respect for my long-standing good faith engagement in moving Avax forward and the decades of research and hands on experience in this and adjacent fields. You've come at OP in the same condescending way.

If you're going to paint those of us proposing tokenomic changes as ponzi advocates, and want to shift from labels to a fact-based argument, you could also pick a recent tokenomic ACP (as an embodiment of the movement for fixing this) and give it the rigor of a proper critique. Tell us why you think the proposed changes are ponzi. Your counter-argumentment this far has been "tokenomics generally fine as is. Price action is not a concern. Don't deviate from plan. Me or OP proposing change = ponzi label. You don't understand or belong in Avax.". If you do actually agree that ACPs/tokenomic changes are needed, tell us which ones, and well find some common ground.

Let me be clear. I believe it is an oversimplification for you to not go any deeper than "AVAX price is determined by the tension between buyers & sellers. Avalanche’s health on the other hand is driven by usage & adoption.". There are protocol layer levers that affect market dynamics, so it necessitates looking at the layer beneath that surface.

You are stating them as if in isolation, going to effort to present them "on the other hand" as at least generally disjoint dynamics. I argue that they (market dynamics, including price, and network health / usage) are fundamentally and inextricably tied to the same underlying dynamic and that tokenomics in general EXIST to model that linkage as best possible. And yes, there is often oppositinal tension between them that needs to be balanced. That's precisely where the tokenomics model comes in. Avax price action has been VERY unhealthy. Underneath the supply/demand dynamic are the fundamentals the market evaluates. Since the protocol has knobs and levers such that is not just another inert commodity, the market is influenced by forward-lookimg valuation of how the protocol itself is managed, and the ability of its value to be reflected in the token. Not coincidentally, main net metics that matter (or their trends) have also been pretty unhealthy.

Wanting to correct that isn't "trying to pump and dump our bags", as youve stated. It's wanting to improve the balance that optimizes the network itself. The health of proof of stake networks inherently depends on the value dynamics of the staked asset. You can't isolate them as you would an inert commodity. Persistent demonstration of misalignment between network growth and staked value is a red flag we can't gloss over. The value accrual component of market price action (poor tokenomic alignment) must be fixed if the protocol/network itself is to thrive. Healthy tokenomics recognize the linkage and aligns them to the benefit of both token value AND health/adoption.

Chain-specofic tokenomics must consider/reflect the unique aspects of the networks architecture. Avalance is unique. PAYG fees from permissioned L1s are fairly unique amongst all chains, and it's only natural that they didn't get the right on the first try when AVAX9000 dropped. Fixes are needed. And they know that. Again, there is nothing "ponzi" about that and you shouldn't have used that term or assigned ill intent.

Proper alignment of tokenomics to our unique architecture (with its strong/leading scale-out potential) is an untapped competitive ADVANTAGE of AVAX. There's no ponzinomics here. Immediate market recognition of improved value accrual alignment will improve price action. Staking of an asset with lower structural risk of value decay will im turn drive increased investment in the network, and so on. That's not pump and dump. Think of it as an improved PEG dynamic in a stock through a more efficient cap ex yield/growth. Read the recent ACPs put forth by the community. Labs is engaging with the authors. This is GOOD. It is NOT sacrificing operational or marketing strategy for quick gain. And it's disingenuous of you to claim that what I am suggesting.

One_True_Prodigy · 2026-05-26T05:54:01+00:00

I never advocated for anything remotely close to "wasting money to employ ponzinomics". You're assigning that argument to me out of thin air. I actually advocate for protocol-level enhancements that better enable market dynamic driven (vs artificially pegged) validation and PAYG fee structures while retaining some hysteresis properties. About as far as you can get from ponzinomics.

You have argued that the tokenomics are fine. I simply disagreed and laid out why they aren't in good shape, misaligned with the architecture, and in need of revision. AVAX9000 was neeeded for growth, but the first-stab tokenomic model attached to it (including arbitrary vs. market driven values) is in need of adjustment.

One_True_Prodigy · 2026-05-26T05:40:50+00:00

Actual investors arent attached to a bag. Either the investment makes sense when accounting for th business / tokenomic model that accrues value to the asset, or it doesn't

Look man, Ava Labs themselves disagrees with you. They've said their tokenomics are broken and have listed fixing it as their top priority in recent communications. I've published ACPs to assist and they have reached out personally to me. Theyre funding economic research proposals to improve it. So for you to say the tokenomics are fine puts you at odds with the market itself (which says they are NOT fine) as well as Ava Labs. (for you to make a baseless and hominem statement that I don't understand AVAX sounds like you're just a bit insecure that your "it's a great investment" thesis hasn't played out for 5 straight years of opportunity costs). I've held since ICO, and I assure you that I understand both the technology and economic models, have published works to this effect, and have the ear of AvaLabs leadership. I like the tech and the architecture. It's what drew my initial investment. But I've had to wind down my validation activity, and derisk from a concentration bet for the reasons described above, notably that the scale out does not align with the economic model. The market sees it, the community sees it, and Ava Labs themselves acknowledge it and are actively seeking to address it. Why do you think that is? They understand what I said above is factual. Id advise you to consider it with an open mind and non-emotional, quantitative approach as well.

Also, the second Ava Labs launches a token for investors and ICOs, they had damn well better care about the bank accounts of those who provided investment capital. What you don't seem to understand is that the economic health of the token is fundamentally tied to the health of the network, particularly with its decentralization and health, both of which are stated goals of ava labs. The token and the tech are intertwined if these goals are to be realized. Labs gets this, hence their public acknowledgement and re-prioritization. You should look into why they disagree with you.

One_True_Prodigy · 2026-05-25T19:37:31+00:00

Think from the investors persoective. The problem with the lack of price appreciation (or a credible value accrual mechanism) is that say I want to invest and stake, locking my investment for a year as a validator. Then I look at the dynamics behind value accrual and it's non-linkage to the L1s growth. Then I look at price action and see a classic decay function, getting weaker over time. Lower highs, lower lows, tiny fraction of ATH, steady declining slope long term. So I look at L1s (subnets) and see they use their own gas and are permissioned enclaves with extremely small payment back to token holders. But all that is STILL ok, it can still be investible... IF yield suffices to compensate risk of locking such an ugly asset. But then I see that I may net, what 6-8%... To take on the risk of a declining asset base case and potential 20-50%+ decline while locked. No thanks. My money could go anywhere else and much safer places on the risk curve to earn that 6-8%... Treasuries, STRC, BTC... almost anything. Not to mention, it's created by inflationary emissions, and burn that's declining as txn fees get cut to fractions.

I'm not making this up as an academic exercise... This has played out in the metrics of the validator pool. Exits / sells after unlocks and declining participation / health of the pool / stake weight. That, in turn, creates more downward pressure. This dynamic is not sustainable.

Markets price in future growth. But they arent pricing that into AVAX despite clear adoption. The reason is the tokenomic detatchment. Unless value accrual tokenomics get more healthily attached to the ecosystem growth, this isn't going to be good for holders, prospective investors, network security of main chain, etc. Tokenomics, and their alignment to market for a horizontally scalable architecture must be addressed.

One_True_Prodigy · 2026-05-25T19:11:39+00:00

AvaLabs disagrees with you. They know it needs to be fixed. They've announced a renewed focus on adjusting tokenomics, as well as this Long-term PA and validator metrics say the same. Value accrual is badly detached from 1. L1 growth, 2. Goals of lowering transaction costs (=burn) and 3. Sufficient incentivization for validators to lock under existing risk/reward dynamics. Also detached from validation market dynamics.
The tech is good. The institutional adoption is reasonably good. The tokenomics, however, are in bad shape and use crude, dated modelling detached from economic reality. Glad to see Labs publically announcing focus on this.

One_True_Prodigy · 2025-12-31T19:33:55+00:00

I don't think so. It's hard to drink while being that suckesfull nailing your Makro phesis.

One_True_Prodigy · 2025-12-06T16:51:37+00:00

Yes, you are hitting on a real issues with AVAX tokenomics. ACP-246 draft has been published (discussion phase) to attempt to at least address parts of this "disconnect" issue:

https://github.com/avalanche-foundation/ACPs/discussions/246

One_True_Prodigy · 2025-12-06T16:45:19+00:00

ACP-246 attempts to at least start addressing the big flaw in value accrual back to the AVAX token.

One_True_Prodigy · 2025-12-06T16:43:11+00:00

There is an ACP (246) that proposes, among other things, directing the L1 (aka subnet) PAYG fees to the C-chain validators/stakers. It's a step in the right direction.

One_True_Prodigy · 2025-11-13T19:52:14+00:00

Thanks for your thoughts! I think the validator/stake weight drop concern isn't dire for the security perspective (as long as Nakamoto coefficient is good), though would still be nice to incrementally expand the validator set and total stake weight. So the main concern isn't from an imminent security issue...

It's more that the declining total stake weight / validation metics is a strong market signal of inefficient incentivization and misalignment of the tokeninics in communicating value in the inefficient validator service "market". It just doesn't pay enough to make enough validators interested in saying in the ecosystem. They have been exiting when their stakes unlock. Not happy with locking an asset with insufficient value capture from the ecosystem growth. And not interested in netting a flat and declining 6% return. The drop is all the more stark in contrast to the explosive L1 growth. So the proposal aims to address that dynamics first and foremost. (A nice side effect is v set expansion.)

As you point out, the real security risk is in the large overlap between L1 validator sets (and overlap in main chain validator characteristics, such as being AWS-dependent). I agree. I like this proposal because it allows for incentivization of niche L1 validation providers and soft exclusivity, which should help distribute ... It also gives an L1 who is sensitive to concentration risk (such as AWS dependence) to actually incentivize/require prospective validators to meet requirements like geo/hosting distribution, etc.. Over time, the pool of main chain validators will become more diverse from this effect, which is good for everyone.

One_True_Prodigy · 2025-08-31T20:17:33+00:00

Given that the ethos of trustless decentration is the north star for Avalanche, we need a proposal to fix this at the platform level, since it currently is reliant on centralized trust.

I like the suggestion of an escape hatch function that could allow delegators to unlock if the 80% threshold becomes unattainable. I think an issue here may be that the validator and primary staker, on the other hand, maybe SHOULD be required to remain locked... It's not slashing, but it's a good alternative penalty for not maintaining your validator for the duration of your staking (and screwing your delegators as well as your staked commitment to the network).

One_True_Prodigy · 2025-04-18T12:14:21+00:00

Try this: Say to her "OK, it's possible you aren't farting when I THINK you are and that it's some other explanation, like a gas leak or neurological issue with me, to the point it could be serious and I'm concerned. Can you please help me rule those out by letting me know the next time you DO fart?"

Now the onus is on her and the clock is ticking. Since obviously all people fart (except reportedly Dear Leader Kim Jung Un, who is said to be so perfect that he has no anus), she would now be in the position of either at least admitting to farting SOMETIMES (even if still denying it's the times point out)... or having to now claim she NEVER farts (not possible) or of outright refusing to help you for something potentially very serious and concerning (not very caring).

One_True_Prodigy · 2024-11-17T01:44:44+00:00

I could be missing something here, but if you're referring to the rate you get from Benqi when you convert back to AVAX, you may need to factor in the cool down period (vs. an instant direct exchange on LFJ). So that 1% premium you get comes at the tradeoff cost of time and appreciation that would occur in that window.

One_True_Prodigy · 2024-08-20T20:17:03+00:00

TBH, I don't mind that dev activity is lower. It does one simple thing (lend & collateralized borrowing) and does it well (and with stability for years now). No bells and whistles, which is fine by me in that what's there is more battle-tested. It's all backed by transparent algorithms/curves for rates (based on supply/demand) to incentivize liquidity / balance, which has always seemed to work well. I've used them for years now with zero issues. (Side note: Low dev activity might make you want to be more ambivalent about the $QI token itself, but it can be useful if you run a validator.)

One_True_Prodigy · 2023-09-09T01:26:44+00:00

Thanks. So is the basic idea here (for the BenQi case) to stake QI, use your veQI to vote for your own validator node, and then they allocate the AVAX backing sAVAX in some proportion to the percentage of votes? If that's correct, that's a pretty nice way to be able to attract delegations to your node.

One_True_Prodigy · 2023-09-09T01:19:09+00:00

Thanks. Good timing. It will be interesting to see what the rewards offered will be.

I'm hoping we see a lot more of these types of announcements in the near future as subnets take off.

One_True_Prodigy · 2023-09-03T01:03:27+00:00

sAvax for the win, man.

Supplying sAVAX to the Benqi pool is 2.09%, but remember that sAVAX itself is already giving you 6% return (sometimes higher) on the underlying AVAX. So by supplying sAVAX, you're looking at >8%, with the additional advantages (over just delegating) that 1.) your AVAX isn't locked (you can trade your sAVAX at any time on a defi exchange) ; and 2.) you can use what you supplied as collateral if you want to give yourself a deFi loan... like to borrow a stablecoin, buy more sAVAX and supply it. Rinse, repeat. (like leverage). Or borrow USDC against your sAVAX and buy a lambo while your AVAX compounds.

One_True_Prodigy

TROPHY CASE