The objective of limiting supply is to hope that it might lead to higher prices due to reduced selling pressure. Want to see proof that this is incorrect? Just look at the daily volumes of the top assets. The top ten assets each have lots more daily volume. More are being sold daily compared to DOT. Their prices have not suffered.
The problem is first and foremost insufficient investors are buying. Polkadot has not achieved critical mass required for sustainable growth. I have some thoughts why that might be but don’t want to hijack this thread.
Cool that you hold so much DOT! So, right you can read the risks of capping supply here:
But it is important to weigh the current situation and the damaging effects of having a token worth selling stated here:
Gradually stepping down supply forces the network to become profitable or face the consequences of reduced income. But today we are already facing the consequences of unlimited inflation.
Looking forward to hearing your thoughts in another thread! Indeed capping & stepped supply aims to Stop the Sell and the disastrous consequences of the bleeding.
It also forces the network to become profitable (and worth buying) or face the consequences of reduced income from inflation.
I just believe in network, it’s never been about money for me. Sure it’s great, but somehow I was drawn to Polkadot/Kusama in 2020, and never left? It’s interesting enough as it is, I actually enjoying learning about it, you won’t get that anywhere else. 2024 was actually the first time I could ever actually afford to hold DOT, from profits I had initially made from Astar.
As far as income (or interest) goes, I really don’t care (personally). I generally just stake for network security, but if the network is already preliminarily secure? I’d put it in DeFi options through Hydration or Moonbeam. That’s what DOT “should” be used for.
I’d prefer if our staking options were through a reputable parallel network/dapp than DOT itself. That’s the entire purpose of being a DeFi hub! Let the developers develop dapps to deal with the incentives to remain on network (like GigaDot for example).
As far as unlimited inflation goes, I’m all for the reduction. It will have a very positive outlook on the finality of Polkadot’s supply. If anyone has paid attention to Polygon recently, they went (from a set supply) to an infinite supply and that basically removed community/market support for the network.
Sure, happy to share some thoughts. I might post a link here if anyone is interested.
Back on topic, the reason I’m arguing against cap/stepped supply to achieve the desired objective of higher prices is because I don’t think the problem is lower supply. The problem is insufficient demand.
Let’s take a look at today’s daily trading volumes on Coingecko. Eth, Sol and XRP have 120x, 24x and 22x of daily trading volume respectively compared to DOT. Meme coins like Doge and Pepe also have higher daily volumes. In spite of the orders of magnitude higher daily volume in some cases, their asset price have not suffered.
So the problem is not supply but demand from buyers. If the proposal goes ahead to limit supply, you are barking up the wrong tree. Moreover, if low supply is the answer, the price of Kusama should be around $356 based on its supply relative to DOT. You may also be aware of the existence of bitcoin runes that were the rage some while ago. Most of them were limited to 21 million, just like Bitcoin. None of them have taken off.
If it’s not already obvious, the challenge is to increase demand. I have some thoughts for why Polkadot ended up where it’s at and the changes needed to hopefully turn things around. I’m happy to share them if it will be of any help in making sense of it all.
I honestly don’t even care about the price. It’s literally not something I have vested interest in. That’s what “everyone else” is focused on, literally everyone I talk to online is only worried about their profits!
I’m seeing a 2014-Ethereum vision in the future and I’m vested in the technology that Polkadot brings, I want to be around for the long-run. I know the state of popularity for Polkadot is really not high currently, but it’s not just here? I see the vision of the future and I want to take part in it. I didn’t consolidate all of my interest in cryptocurrencies to Polkadot for no good reason at all? This is THE network that is going to do something impactful, and I really do not see that anywhere else? These things take YEARS to develop, we’re still in the infant stages here, especially with PVM, JAM, and Polkadot 2.0 yet to be released. I want to take part however can.
Inflation is just beating around the bush. This is just semantics. I want to see what JAM can do when it starts onboarding active networks and see how far scalability can be pushed? Because I do not see any other network scaling to this magnitude? It is a SERIOUS issue, that no one is paying attention to.
Sure everyone is making money hand over fist on their alt networks, but longevity is the key here and you do not want to be sitting around flouting old technology, hit a scalability roadblock, and then take years to fix it?
BTC alone damn near crashed when Ordinals came out in 2023, during the bear market, what more when OTC BTC/ETH run out, and everyone has to rely on new blocks (you can’t mine ETH any more lol)? This year was the first time in literally my entire time in this space where I saw EMPTY BLOCKS on mempool because no one is buying new blocks, all OTC. It’s going to get bad.
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