Decentralized Social

If anyone asks you about DeSo&#39;s tokenomics, just send them this <a href="https://x.com/nadertheory/status/1738303883829711335?s&#61;20" rel="noopener noreferrer nofollow">post. </a> 1. There is no equity, just coins and code. There is only ONE asset that everyone owns, and that is the <a href="https://www.deso.com/" rel="noopener noreferrer nofollow">DESO</a> token. That means when you buy DESO on Coinbase, Gate, or HeroSwap, you have the SAME THING that any VC or &#34;sophisticated&#34; financial actor has, including me, with ZERO conflicts. Bitcoin didn&#39;t have a corporate entity behind it, and neither did DeSo when it launched. This is important because most projects, including majors like Solana, have a for-profit corporate entity behind them that VCs invested in *separate from* the token. We&#39;ve seen with projects like Uniswap and Brave how this can lead to conflicts of interest, where value accrues to equity-holders who have a &#34;fiduciary duty&#34; rather than to token-holders, who have none. In fact, any token backed by a for-profit company like Uniswap or Solana could be SUED by equity-holders for distributing too much value to token-holders, rather than milking the network value for equity-holders. It&#39;s honestly a really messed-up situation. Why is DeSo set up differently? Because I saw this conflict come into play with my first company, Basis. I&#39;ve never told this story publicly, but when we decided to return capital to token-holders who had invested in Basis using contractual agreements called SAFTs, our equity-holders pushed back. If I had unfriendly or ruthless equity investors, I could easily have been sued for what I did because the &#34;fiduciary duty&#34; to equity-holders dictated that the &#34;right thing&#34; would have been to heist the token-holders for all they&#39;re worth and distribute all of the money raised directly to equity-holders, of which I was the vast majority owner. Practically, this would have meant distributing ~$130M raised from token-holders to equity-holders who had collectively put less than $3M into the project. Needless to say, we were able to do the right thing because I had great partners-- but I was lucky to get out of that situation without being sued, and it&#39;s why with DeSo I swore to myself that the token would be the ONLY thing anyone can own. Yes, being a pure token project made it SUPER HARD to get bigger players to back the network, and many passed because they didn&#39;t know how to back a token without a corporate entity behind it (ironic). But it was worth it because now we have something that is both ACTUALLY decentralized and aligned with unbounded growth for the long-term. 2. All tokens are liquid, with no funky unlocks. There are no future unlocks to dread with DESO. There is no queue of people lined up waiting to dump on you. All coins are fully liquid, and have been for years now. Any paper-hands would likely have sold by now, meaning the percentage of people who are in it for the long-term at this point is likely quite high compared to other projects, and ever increasing. In contrast, projects like Worldcoin and even Solana have what I would call unfavorable unlock schedules, where large percentages of the supply relative to the current float unlock suddenly in the future, posing a major risk to retail investors who are unaware of this looming dump. Why did I set DeSo up differently? Mostly because I just hate playing games. Either we&#39;re going to create real fundamental value with DeSo or we&#39;re not. If we create value, unlock games don&#39;t matter, and if we don&#39;t create value then we&#39;ll be a zero in the long-term anyway. A lot of people pressured me to muddy the waters, to have a low float initially so that I could have a high market cap. I passed on that, and I&#39;m still glad I did. In the long-term all that matters is that your products are too good to ignore. 3. Fixed-supply of 10.8M short-term, deflationary long-term. Currently, DeSo&#39;s supply is capped at 10.8M, which is HALF that of Bitcoin. Why this number? Because I thought it would be cool to have *even fewer* coins than Bitcoin. Yeah, sometimes with decisions like these there&#39;s no right answer and so you just pick a cool number. In hindsight, a much higher total supply probably would have been better because people like to buy things that feel &#34;psychologically cheap,&#34; e.g. $0.01 per token is more attractive than $1,000 per token. But it didn&#39;t seem like a big deal at the time because we could always do a coin split via a hard fork in the future, which we are planning to do once DESO becomes more expensive on a per-coin basis (possibly as soon as 2024). Note that a coin-split does not affect the value of anyone&#39;s holdings because if you had 1 DESO coin worth $10,000, and if we did a 1/10,000 split, you&#39;d then have 10,000 DESO coins worth $1 each. It is purely a cosmetic change, but a potentially important one to make eventually. But the TLDR is: It&#39;s been fixed-supply at 10.8M coins since 2021 and it&#39;ll be fixed-supply in the short-term... That said, DeSo is moving to our state-of-the-art Revolution Proof of Stake mechanism in Q1, which will change things a bit. Revolution will give people a ~20% APY yield for staking DESO, but it will also introduce what we call our &#34;burn-maximizing fee&#34; mechanism, or &#34;the BMF&#34; for short. The BMF strives to burn the theoretically MAXIMUM amount per transaction. This means that DeSo is positioned to be the MOST DEFLATIONARY chain in the long-term. Yes there may be some initial inflation in the short-term, as fees may not fully recoup the APY being given to stakers, and this period could last for some time. But you can easily avoid getting diluted simply by staking your DESO, resulting in a fixed or increasing percentage of the total supply. Notice that, unless *everyone* stakes their DESO, your percent ownership of the network will strictly *increase* if you stake, which helps to promote decentralization. These are the tokenomics that matter, but you can learn all about Revolution and how it works here: <a href="https://t.co/txsy7PYXIe" rel="noopener noreferrer nofollow">http://revolution.deso.com</a> 4. Nobody got their coins for free. Unlike other projects that have free airdrops, where people get coins at a zero cost basis, everyone outside the core dev team who holds DESO today either had to buy it on an exchange or had to convert Bitcoin to get it through an atomic swap process we refer to as &#34;burning,&#34; with a small amount (&lt;2%) allocated to PoW mining. Why did I set it up this way? Because I believe that people who are involved in the ecosystem should put SKIN IN THE GAME. Do you want your early adopters to be a hoard of mercenaries that get free coins that they dump instantly? Or do you want that base to be people who believe so much in your project that they burn sweet, sweet corn to get a piece? What prices did all those Bitcoin-burners get? Well, actually, you can determine that just by looking on-chain because all Bitcoin-to-DeSo swaps were executed fully-decentralized via a novel atomic swap mechanism that was embedded into the chain. But I&#39;ll save you the trouble. The full list of everyone who burned Bitcoin for DeSo, and the prices they got, are here. And remember their coins have been unlocked for years now: * <a href="https://t.co/T5ovbosYHP" rel="noopener noreferrer nofollow">https://docs.google.com/spreadsheets/d/1eSlyJzP8kkLdoNmExDiKrIXKnjjDE3wCPAHvH4wNB4s/edit#gid&#61;0</a> <a href="https://t.co/T5ovbosYHP" rel="noopener noreferrer nofollow">…</a> The portion allocated to PoW mining is defined in code here, and comes out to approximately 190k tokens in the next 15 years, or less than 2% of the total supply. Note the amount will be much less than this because of our move to PoS, though: * <a href="https://t.co/LWKjRnocgD" rel="noopener noreferrer nofollow">https://github.com/deso-protocol/core/blob/7393afdca05dbd6e56fb1fb04f0a00ab8c203ec9/lib/supply.go#L46…</a> There is arguably an exception, which is that approximately 2 million coins (&lt;20%) were distributed to the core team initially, of which a significant percentage is mine. But I would argue these are the people who put the MOST skin in the game to support the ecosystem by putting in their hard labor to build it out. I certainly wouldn&#39;t say they got their coins for free, and I personally am a big net-BUYER of DESO in spite of my initial allocation. What&#39;s more, 2 million coins is &lt;20% of total token supply allocated to the initial team, with ALL of the rest requiring Bitcoin-burning or CPU mining in order to get them. Compare this to other chains like Solana that allocate 50%&#43; to equity-holders and/or team. If you add up the amount of DESO distributed via the Bitcoin-burn mechanism, the small amount allocated to PoW mining, and the 2M founder coins, you get the total supply of ~10.8M. 5. Designed for the end-game. Why do I mention all of the above? Because I think it highlights an important property of DeSo, which is that every decision was optimized for the end-game, a decade or more from now. We&#39;re not here to make a quick buck, it&#39;s not our first rodeo, and we certainly aren&#39;t tourists. We think extremely deeply about every decision and its long-term impacts, precisely because we will STILL BE HERE when those long-term impacts come into play. And with Focus, our next app, we&#39;re putting that same long-term thinking into the product side. When you support the DeSo ecosystem, you&#39;re supporting a team that really cares about their craft, and I hope the thought that went into all of the above decisions helps to show just how much we care.

DeSo Tokenomics

Decentralized Social

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