/biz/ - Business & Finance

The inflation of the protocol itself is only around 5-6%, but there's still a not small amount of locks to open. It's theoretically not inflation, but supply will keep growing higher for another 2-3 years.

>>51008725
Most AVAX is staked or delegated to nodes (64% and going up) and the rest of the AVAX is in DeFi.
Also every new node (for subnets too) needs to lock up 2000 AVAX minimum.
Inflation is like 6%.

>>51008741
it will all get staked or delegated to Nodes as is already the case and thats what already happened with the unlocks.
every token unlock was actually Bullish for Avalanche so far.

>>51008725
uh oh anon found out about the TURKISH levels of supply inflation
here come the roaches

picrel
the current YoY circulating supply inflation rate is 64.1%. (285m/173m) - 1.

>>51008725
>inflation
We have a 720 million AVAX hardcap, noob. It's not inflation, and since it's a known limit you can consider it priced in.

>>51008725
emission refers to currency creation which for AVAX is done through staking rewards. The staking rewards for validators is about 9.5%. Only about 60% of AVAX is staked which means that current emission is about 5.7%

>>51009196
token unlocks don't create currency and thus don't affect price as you can see in your pic, there is no correlation. only staking rewards add tokens to system.

>>51008753
Source? TVL has fallen over 80% for AVAX since the peak in November 2021.

>>51009240
Do you know what happens to the burned fees? Are they sent to some inaccessible wallet, or are they literally removed from existence?

>>51009240
If the circulating supply goes parabolic (it did on Messari as that anon posted), then effectively you are injecting more currency into the circulating supply, causing inflation. If I had 10 trillion dollar notes in circulation, but I had 10 trillion dollars stored away and then suddenly injected all that money into the economy, that causes inflation. Economics 101. It's not just the mechanism, it's the exposure of that mechanism to the economy.

>>51009258
>TVL has fallen over 80% for AVAX since the peak in November 2021.
TVL is measured in dollars, right? Of course it makes sense, since all alts including avax dumped >80%...
Avax is still doing really well, relatively speaking. The ecosystem is thriving and recently set new daily transaction ATH's.

>>51009240
>token unlocks don't create currency
But they DO dilute the available liquid supply, which is all that matters for price. Price is set on the margin, not by stakers or vested coins, but by liquid supply. Imagine if the FED printed $10 trillion dollars, but then set it aside and said "okay, we're going to give these to you but slowly over a ten year period" - would that not be inflationary on the liquid supply of dollars? AVAX is doing the same thing but with chuckie cheese tokens. Just like every other creeptoe, a more or less well crafted scam.

>>51009235
That's not how inflation works at all. Inflation isn't defined by a hard cap. It is defined by how fast the supply of an asset or commodity expands, or how rapidly prices rise within a given time interval.

>>51009278
>If I had 10 trillion dollar
we literally just came up with the same example independently within a 2 minute time window, wtf

>>51009240
The token burn massively decreased after the biggest tx making dapps moved to their subnet bro

https://avascan.info/stats/burnedfees

Burn is a nothingburger right now. Subnets being able to use their native tokens as gas was a huge mistake in terms of capturing value for AVAX.

>>51009294
>>51009295
Ok. But the Avax price is denominated in dollars, and its worth is currently purely speculative (as with 99% of all crypto aside from Link). It's not impossible that 720 million is already priced in.
>t. pic related

>>51009258
https://vscout.io/
staking ratio is sitting at 66%
Avalanche's DeFi TVL falling 80% sounds about right since the token value fell about that much from ATH

>>51009272
no idea, I think the efficient way is to erase them from existence. But sending fees to 0x0000000000000... works just as well. The extra transaction seems wasteful though.

>>51009278
there is no price correlation even with the massive early unlocks, so it's pretty obvious it doesn't cause inflation. All unlocks going into 2023 are relatively tiny and only go to the team and community fund. No more VC unlock FUD from here on out. At least not any that makes sense.

>>51009285
It's fallen over 60% measuring it with AVAX but you didn't address my question about supplying a counter-source

to be clear I made good money on AVAX last year, I like using it
but it can easily go back to single digits with this level of liquid supply inflation. It's all just a question of demand at this point, and I don't see a whole hell lot of demand in the near future

>>51009316
>there is no price correlation even with the massive early unlocks
Then you would agree that there is no correlation between the $7 trillion of stimulus in 2020 and the inflation (devaluation of currency) of 2022?

There is no direct correlation, yes, that is because the effect of increasing liquid supply is felt with a lag.

>>51009318
What do you want a source for? I didn't think it was clear. (I'm not the anon you asked for a source by the way)

>acting like AVAX is going to be relevant in 5 years when Ethereum still exists
>acting like bitDAO doesn't buy hundreds of ETH every single fucking day
>Acting like people still give a shit about this network

ETH is king. Seethe.

>>51009294
>>51009331
>>51009351
At this point all unlocked tokens are going to the Team/Community/Foundation which haven't created much sell pressure since they seem content to hold. Worse case is that they dump some AVAX tokens into DeFi incentives, however Avalanche Rush was a period of peak growth so it would be hard to call that a worse case scenario.

Also the unlocks were well known events and price movement indicates they were priced in from the beginning. More evidence to support this is how AVAX didn't crash in a particularly unusual way except for the septuple mint bug which wasn't unlock related. It's generally followed other L1 DeFi shitcoins like SOL/FTM/BNB

>>51009314
The fact that AVAX is priced in dollars when the actual dollar experienced such rampant inflation and AVAX seems to have an inflation of 20% is insult to injury. That's over double the US CPI. Once again, a hard cap has little to do with actual inflation, and everything to do with the rate new supply enters into circulation within given time intervals.

>>51009379
Lets compare ETH2 to Avalanche:

>ETH staking withdrawals will not be available right away
Avalanche withdrawals are available since Mainnet launch YEARS ago
>The current plan is to deploy the withdrawal functionality in a software update 6 mo - 1 year after the Merge.
essential stuff like this was never missing on Avalanche, this means you have to stake ETH for up to a year, maybe even longer while on Avalanche you can Stake for 2 weeks minimum or 1 year maximum or anything in between.
>The current projected income rate (for ETH) is around ~4% APY
Running an Avalanche Node has a proven 9% - 12% APY (paid in AVAX) since Mainnet Launch 2 years ago.
If you run a Node you get Staking rewards, % of your delegators rewards and Tokens from validating several Subnets. (The Golden Subnet Bullrun has not started yet).
>Also the withdrawal system will be implemented as a queue to limit the amount of ETH that can be withdrawn per day,
there is no queue on Avalanche, its instant, sub second, its finalized faster than you can press F5. thats all transactions or smart contract interactions on Avalanche, even when you go crosschain between X Chain and P chain and C chain and other Subnets its instant. Sub Second finality.
>Transactions take 14+ Minutes until they are finalized
I repeat: on Avalanche transactions are almost instant.
>Ethereum has Slashing which means you can lose your stake due to a Hardware or Software bug
No such thing as Slashing on Avalanche.
>ETH2 has Censorship at the Protocol level as all validators are ran by Kiked corporations
on Avalanche you have independant Node operators.

now if you still cant figure out why Avalanche is superior you must have some sort of Braindamage.

>>51009379
ETH 2.0 is inexorably fucked. Still a good hold though since the reckoning is pretty far off, maybe 2-3 years. About a quarter of my portfolio is ETH.
>https://www.youtube.com/watch?v=gyP0uxxB6V8

>>51009418
>price movement indicates they were priced in from the beginning
Price movement indicates that a fuckton of demand showed up on the back of trillions of printed dollars. Supply inflation is irrelevant in the face of overwhelming demand and number go up. When the demand dries up, that's when supply inflation matters.

I agree that since most of the liquid supply is from team/foundation unlocks, they will likely limit outflows as a strategic decision not to suck what little $ liquidity is left. AVAlabs will have to distribute some over time in order to cover development expenses. The effective increase in liquid supply may only be 1/3 the actual, say 20% - but that's still 20%.

>>51009471
>Running an Avalanche Node has a proven 9% - 12% APY
okay now lets factor that against a 20% circulating supply inflation rate. The real (inflation adjusted) APY is between -8% -> -11%. Running a node is -EV, you are volunteering to get dumped on unless outside demand shows up for the on-the-run supply

>>51009517
Most AVAX is staked or delegated to Nodes.
Staking Ratio keeps going up.

>>51009486
>AVAlabs will have to distribute some over time in order to cover development expenses.
probably not necessary considering they raised $350 million back in April. Not sure what their warchest looked like before that, but starting an ICO right before the bullrun was a smart idea, or just lucky more likely. Ava labs has a disgusting amount of funding, 2nd only to SOL if you don't count ETH.

anyways it still stands that the sell pressures are pretty well understood meaning that it's close to priced in. If Ava labs decides to rug it and dump everything then it's fucked obviously, but that's a risk inherent in just about every shitcoin. Even Bitcoin, the most distributed crypto, still has some whales that are big enough to do shit like that.

>>51009583
>probably not necessary considering they raised $350 million back in April. Not sure what their warchest looked like before that, but starting an ICO right before the bullrun was a smart idea, or just lucky more likely. Ava labs has a disgusting amount of funding, 2nd only to SOL if you don't count ETH.

I think you forgot about the $200m lost with the retarded Luna/AVAX swap, they wiped a fat bag of their Dollar gains with that

Staking nodes inflation defi nigga am i gonna make money off this or what

>>51009606
>$200m
they ended up selling most of it before it plummeted to zero, so they only lost $60 million

so up $290M and that's only considering the round of funding in April 2022. I wouldn't be surprised if they had $1B overall

>>51009240
>token unlocks don't create currency and thus don't affect price
avax holders are the scummiest people on the planet