Creating a place for all talk tokenomics.
With regards to the the current price of the mist token, it may also be worth considering that Alchemist may have been over valued essentially since a few days after it’s inception. The amount of hype and buy-no-think apes that just bought Alchemist after a few YouTube influencer videos pushed the price too high. I mean, do we really think Alchemist had better fundamentals supporting it’s price back then or that it does now? I think most would agree that Alchemist is currently at an ATH in terms of fundamentals but at an ATL in price terms. All crypto economic systems started their token economic journey with inflation but many have recently been experimenting with new more intricate forms of inflation, or even deflationary systems in some cases. Changing to one of these systems may certainly have a positive effect on price but it is unclear if the new tokenomics will be sustainable in the future. There may be a better, newer, more hyped tokenomics scheme that comes out and we are in a down trend and maybe it’s time to change again. All of these tokenomic schemes are interesting but the reality, in my opinion, is quite simple in the long run. Are the fees generated from alchemist products > the inflation every 2 weeks? If no, then inflation probably is still need to subsidize LPs, which allows the teams to continue working. If yes, then maybe we consider turning off inflation or lowering inflation. If we lower / turn off inflation we may need to adjust the amount of fees LPs get to keep them interested. In a world that our products generate enough revenue such that inflation is unnecessary, this will become an increasingly smart choice for investors to invest in because the fundamental value proposition of the mist token will be that you are entitled to fees of multiple blockchain applications or other fee accrual vessels. This will be more attractive to smart money than the latest and greatest inflationary scheme based on a single product not yet generating revenue. If you are a product and are generating revenue and inflating your token’s supply that will increase sell pressure and decrease token price, since you are essentially receiving extra tokens.
Eventually data platforms like token terminal will display mist and as our fees grow relative to our mcap, or other metrics, we will be seen as an increasingly attractive investment. This coupled with an eventual turn off or decrease in inflation will further increase our attractiveness. In the meantime maybe we all just think that Alchemist is more valuable then what the market says we are worth, and let’s not forget that the market has 2 dog coins in the top 20.
Many people, including myself didn’t or don’t, understand what Alchemist is all about. We are still a small community supporting a small group of talented builders. Alchemist was able to get to where it is at via a symbiotic relationship with LPs that MUST be remembered. The LPs have carried the $mist liquidity allowing builders to spend their TIME working on Alchemist products. The amount of TIME spent building out Alchemist products has been extremely successful considering all the latest and greatest achievements by the core product teams. However, these accomplishments have come at the detriment of the the LP providers which has been exacerbated by the fact that the overall cryptocurrency market has largely been in a bear market for the past few months. This leads me to my main points. First, I would argue that a significant chunk of the unfavorable price action is do to the market conditions surrounding ETH. Not only has ETH been in a mini bear market but it is this reduced price of ETH that has made it a more attractive invest than many altcoins, including mist. Secondly, the market has yet to truly understand the correlation between the development time spent building revenue generating products and the capital requirements need to further continue incentivizing PEOPLE to spend their TIME building. I believe that the market undervaluing this connection and once fully understand price will rebound significantly. NOTE: I will say that I have not been Alchemist community member since their inception, as such I am not privy to the past dynamics between the Alchemist team and community.
I, for one, think this ATL in mist price actually is more beneficial than it is negative. This is because even during this terrible price action filled with LP suffering, we as LPs, myself included, have seen the teams unwavering dedication to Alchemist. Many other project developers would have moved on to other projects and just let the coin die. Our developers surely could find work in other more successful projects no? However, they are still here and the mist fundamentals continue to grow. ATL coin prices are a proving ground for teams that will stick around. See 2018 bear market coin deaths for reference. Not only has the team stuck around, there have been more community members coming forward to help grow Alchemist!
Some may say that Alchemist allocation of coins should not go towards use cases that don’t directly result in the formation of revenue streams. However, we must consider the TIME revenue stream as well. Meaning, how we attract people to spend their TIME doing work for Alchemist. I for one would most likely not be here if it were not for the Alchemist radio / DJ. I have spent a lot of my time recently to build a, hopefully, helpful tool for the Copper community. I am not saying this to be gratified by anyone, including myself, I am saying because you never know what might attract someone to spend their time helping Alchemist grow.
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I’ve been here for a year and the seniors are just not interested. Most of the profits go to devs, Treasury, salary then LP value is perpetually drained. It’s really unfortunate. Mist token has no incentive to hold or utility. It’s not really a community project.
You are right about the perpetual draining of LP value. We need to alleviate as much mist sell pressure as possible. We should attempt to transition such that the only people that sell mist are LP providers exiting their staking positions. We need to move such that Alchemist operational costs are paid for via selling non-mist tokens that are accumulated from the application revenue streams.
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One way that Alchemist could start working towards this goal is by divesting their treasury and multisig wallets of mist. This could be done by using product revenues to buy back their own mist from their treasuries and deposit that mist into Aludel. One Copper buy-back from the Alchemist should provide operating liquidity for awhile. This is one way to instantly reduce the internal sell pressure of mist.
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Keen to hear the Seniors and the council members positions / views on this.
Something needs to change otherwise inflation is going to become unsustainable ultimately.
I’m not sure we can incubate ourselves out of this price point, we must utilise, invest and push forward our current products to generate more revenue.
We have discussed it but right now we want more community views on this, that’s why Discourse was created.
Project funding is determined by the council and is subject to KPIs. Teams should be focused on reaching those and growing their products.
Product teams currently set their own strategies for growth/ revenue generation, whilst I am not totally against investing more in existing products that would come with an analysis of current profitability and an increase community share of the revenues generated.
My personal opinion is strongly against handing more investment to products that have had over a year to generate profits unless there is a clear and concise plan in place that tells me exactly what groundbreaking development they will develop with the money.
(That will still mean a higher profit share for the community)