Design Approach

Historically, token launches on the Solana blockchain have been characterized by certain shortcomings — low float and high fully diluted value (FDV) models often favor early investors and insiders, leaving later buyers susceptible to value dilution. Furthermore, the accumulation of surplus tokens in treasuries can inadvertently diminish token value and erode existing holders' stakes.

To address these challenges, a novel approach emerges — one that challenges the static token supply model prevalent in the ecosystem. Instead of following the traditional path of minting the full token supply at launch and dispersing it among different stakeholders, this new paradigm suggests a dynamic supply management strategy.

Under this unique approach, the token generation event (TGE) would mint only the initial token supply meant for development allocation, investors, IDO, airdrop, and liquidity mining — IDO and airdrop amounts increased, while liquidity mining and treasury were decreased (0 token treasury). However, the power to mint additional tokens would be entrusted to a decentralized autonomous organization (DAO). This DAO would be responsible for governing the token supply, issuing new tokens as needed to fund various initiatives and sustain the protocol's growth.

This dynamic token supply management system offers several benefits.

  • First, it empowers the DAO to balance token value and funding needs, promoting more efficient resource allocation.

  • Second, it reduces the risk of value dilution caused by excess token issuance and treasury accumulation.

  • Third, by enabling the issuance of new tokens for specific purposes, the DAO retains flexibility in responding to market demands and ecosystem developments.

The proposed paradigm leverages the inherent market dynamics to safeguard against hostile takeovers or misuse of minting authority. In the event that token holders vote for excessive token issuance that primarily benefits a specific group, the market's response would likely lead to token value depreciation, discouraging such attempts.

However, this innovative approach doesn't remove accountability. Rather, it elevates it. Any proposal put forward by the DAO to mint additional tokens would need to demonstrate clear value creation. For instance, before initiating a liquidity mining effort, the proposal would need to convince token holders of the potential benefits that outweigh the impact on token value.

In conclusion, this paradigm shift in token launches on Solana aims to strike a harmonious balance between value preservation, sustainable growth, and decentralized governance. By embracing dynamic token supply management and empowering DAOs, this approach could revolutionize token launches, fostering a more resilient and equitable token ecosystem

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