Flow Tokenomics, Usecase, Inflation

Research & White-Papers
1

I want to talk about the Flow minted every epoch, Inflation, usage of the network,…. in Depth Currently(note: Flow is awsome, Relationships, investment funds, technology,… But there is some problem in tokenomics)

Calculation Mint reward every Epoch in PayRewards Function in Flow Staking Contract Flow View Source

mintedRewards = totalRewards - feeBalance

totalRewards: epochTokenPayout (total amount of tokens that are paid as rewards every epoch)
feeBalance: Number of Flow in gas fee
mintedReward: Mint Flow for Staking/ Delegating Reward

———
This is the number of Total rewards according to Flow Staking History: Flow Blockchain Staking Stats

5/5 (1.271.622 Flow Reward)
5/12 (1.272.815 Flow Reward)
5/19 (1.274.010 Flow Reward)
5/26 (1.275.206 Flow Reward)
———
This number is Flow Minted Every Epoch

5/4 (1.270.422 Flow Minted): Transaction ID: 0b6a8f6b23949659338b7f68ee19aa4342ec104dbcf4148f7341e77cb192d0d7
5/11 (1.271.610 Flow Minted): Transaction ID: 34e207b07960c467213136b1d3b7e6a00e404b2ff312d2d2e764b3ec57e4e4fe
5/18 (1.272.804 Flow Minted): Transaction ID: 9a0aaa02902cf71da5f62d5a19be2fc65e1987a4c265da8167ef56deac948d18
5/25 (1.274.002 Flow Minted): Transaction ID: 327a0a26aa75107189da320655fc9978f96109917c1c3ade571dbada1d759adf

———
Relative Number of transactions per Week and Gas Fee (0.00002 Flow/Transaction) Convert to Flow
(I know flow fee can increase due to network traffic, but i want to use fix number to estimate )
Week 18: 3.538.811 Transaction = 3.538.811 * 0.00002 = 70.77 Flow
Week 19: 3.128.840 Transaction = 62.57 Flow
Week 20: 3.719.016 Transaction = 74 Flow
Week 21: 4.728.923 Transaction = 94 Flow

———
Oke, so we can see just 70-100 Flow is used for gas fee and more than 1M Flow Minted Every Week.
As the usage of the network increases, less new tokens will be minted every epoch because fees decrease newly minted tokens for reward payouts.

That’s True But how many transactions reach the Breakeven point?
0.00002 * 50.000.000.000 Transaction = 1000000 Flow

Are 50.000.000.000 Transactions per week is Possible?

And Currently, I don’t see any Flow Demand here. The NFT Projects don’t have to Lock any Token, NFT can purchase via credit, but Did Dapper or other Company Buy Back Flow tokens or Lock/ Burn Tokens?

Ok, the Inflation is around 4-5%, But what is the Demand for Buying Flow tokens?

2

If you think Flow Fees as a tool to prevent DoS to network instead of part of token economics, it all makes much more sense.

3

And I have some of the question

  • For now, I can see a lot of projects are using Credit cards to Purchase NFT like NBA, NFL, Billboard,… I know it is the best way for mainstream users to approach web3 and Flow Blockchain, increase Flow transactions. But Is the Company behind that have to Lock/Burn $Flow or Buy Back $Flow to increase the demand $FLOW?

  • I know that Dapper Wallet will implement $Flow into the wallet around this summer. Because purchasing with credit is much faster and easier, so why should the user have to use Flow to purchase, or any benefit/encourage user to use Flow?

  • When I read Flow Token Characteristic of Flowverse, Using Flow for Payment is good, but I want to ask: Are the Project have to lock Flow Token? Especially for the NFT Project. Because we can purchase with Flow, but the Circulating is still there, the Supply still remains and is ready for selling pressure. I know that $Flow is used for creating accounts, with 0.001 $Flow. Currently, Flow has 8M total accounts, so only 8000 $Flow have used for creating accounts, Deployment fee is cost not too much.

  • For the inflation on Flow will decrease as network fees increase, for my calculation in this post Flow Tokenomics, Usecase, Inflation Currently, On average we have 3-4M transactions every week, with the Flow fee 0.00002 we have used 70 - 90 $Flow for transactions But every week we mint > 1.2M $FLOW, it should take more than 50.000.000.000 Transactions every week to reach the Breakeven point (50B * 0.00002 = 1M $Flow). Even Flow fee is more expensive 10 times, it still needs 5B transactions.(My calculation is in that link)

However, everyone wants $Flow to have more demand and increase the price right? This is in my opinion, Dapper labs did a very good to make Flow go mainstream. But increasing transaction fees is not enough, $Flow should have more utility, deflation programs like lock, burn, and buyback. I know that NBA Top Shot, NFL, UFC,… has a lot of revenue on the secondary marketplace, if the Dapper has the buyback program, like use their revenue, or each transaction buy back 0.1-0.5% $FLOW, that can make a huge difference in the Flow price.

1 Like