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A thread on some crypto monetary policies insights and distinctions after a few months working on supply research for @MessariCrypto.
"Supply" by itself doesn't mean much. One needs to look at circulating, liquid, outstanding and diluted supply to understand the supply of a given asset. The difference between liquid and circulating shows how much of the outstanding supply could hit the market for example.
A fixed outstanding supply does not mean that token holders won't be diluted - rewards can be premined but held in treasury - or that there will be no incentives for block producers - transaction fees and a secondary token issuance can provide incentives.
No premine does not mean that founders won't get funded. This can happen through a % of each block rewards, through superblocks (a block every X blocks that generates a large amounts of tokens for founders) or through a vote to allocate a % of a community-governed budget.
Issuance of new coins can be determined through an inflation rate or an emission amount. Those can be increasing, fixed, linearly decreasing, exponentially decreasing etc. A decreasing inflation rate for example does not necessarily lead to a decreasing emission amount.
Burning policies can take different forms. They can be programmatic (transaction fees, contract creation fees etc…) or non-programmatic (% of profits, one-time burn etc…). They can be combined with the issuance of coins and do not necessarily lead to a deflationnary policy.
Observed halvings intervals do not often correspond to expected halving intervals. This is because, for various reasons, the block time may be lower or higher than the targeted block time. Through time, this can lead to important differences (months or years).
Monetary policies can be adjusted by both off-chain and on-chain decisions. On-chain governance can impact the emission or inflation rate directly, or the lower and upper limits of those.
Monetary policies aren't always predictable. Issuance of new coins can be determined by staking participation, network usage, off-chain events etc. For example, it may be hard to have both a predictable issuance and a predictable staking participation.
The programmability of crypto assets brings so many new possibilities to the design of monetary policies. Exciting times ahead.
