Thread by @ChainLinkGod

Building a global standard is not an easy nor short term task, but one that spans at least a decade and requires a strong mixture of growing team coordinating development, ecosystem of developers integrating the standard, and passionate community to raise awareness

Building a standard does not come for free, particularly when such a standard needs to be both bootstrapped into existence (solve chicken or egg problem) and sufficiently secured to protect eventually trillions of dollars in user and corporate funds

This is where a native token comes into play

Align the economic incentives of ecosystem participants to contribute to networks

Subsidize the launching of networks to bootstap the supply side of a two sided marketplace

Provide funding for a team to develop the standard

This comes in many shapes and sizes, Ethereum as an example

Accessing the network requires users to pay in native token (ETH)

Block reward subsidies to create cryptoeconomic security (2 ETH block reward)

Team allocation to coordinate development (Ethereum Foundation)

So too does this take shape in the Chainlink network

Every oracle service requires user to pay nodes in LINK

Selective block reward subsidy in LINK to bootstrap new networks until user fees take over

CL Team allocation to coordinate development of the decentralized protocol

Such develoment team costs are not just for supporting the network as it exists today, but often for building a treasury of uncorrelated assets to create a predictable runway for any future market conditions for which one cannot predict ahead of time
smartcontentpublication.medium.com/the-purpose-an…

Without develoment of the standard, there would be no standard, networks, nor integrations to be had

There is a reason the most successful companies in the world are primarily focused on growth, reinvesting back into the growth of their network to increase adoption

This is what is often missed, that reinvesting into the growth of the network and creating a predictable runway is exactly what should occur during growth

Projects that didn't expired and died, you never heard of them because of it (survivorship bias)

https://twitter.com/ChainLinkGod/status/1370518093340971013?t=Wqg6UfcCmJJvzr3cBrXn5g&s=19

Tokenomics are not something that are static (though there are exceptions), but most often something that shifts and evolves over time

How a network captures values in its growth phase is not always as it is when operating at a global scale

Protocols (standards) aim to be minimally extractive coordinators, providing the most value to users without rent-seeking, where fair pricing for such services can drive higher revenue through an economies of scale (only possible through adoption)

The value capture of decentralized applications will span different layers of the stack, and while there are many thesis pitches, ultimentally the growth of the ecosystem is greater value capture for all, without the negativities of rent seeking
smartcontentpublication.medium.com/how-dapp-value…

This long term value capture can come in many different forms including the demand side (needing to acquire tokens to access services) and supply side (staking from network operators)

Getting the tokenomics of a standard right is not something to be taken likely in the least

Rushing tokenomics design before the time is right ultimentally sets the scene for disappointment when people who were eager to extract don't realize that extraction is not always the best route to take during growth phrase

That said, what ultimentally drives PA in crypto within the short term are narratives, whether accurate or not

It's the reason the likes of DOGE ($30B) and SHIBA ($13B) exist at the scale they do

But that says nothing of their long term sustainability or PMF

What networks (standards) win out in the long term are those that provide the critical infrastructure that are actually used at scale to powerful useless applications that get used at scale

Getting to that great scale has costs in the short term, but there's one metric to track

Adoption

When you have the highest level of adoption within your vertical, and you're in a mode of growth, then that's when the long term prospects are the most lucrative for every ecosystem participant

https://twitter.com/ChainLinkGod/status/1432557487241064448?t=5F6hM7RGIiXOzYIOsGb5KQ&s=19

Users get highest quality services at the lowest cost to themselves

Individual operators of the networks can generate a higher net revenue

Subsidy allocation can be used more efficiently as the per-unit utility rises

Team allocation increases runway and allows for more growth

Focusing on short term growth costs, without a mindset of what is being built, how value will be captured without rent-seeking, and the socitial implications of standard becoming global, you miss the grand picture as a whole

Within the Chainlink ecosystem, the native token has enabled this standard to become the most widely adopted decentralized oracle network security $60B for the vast majority of DeFi across various verticals (data feeds, rng, keepers, and soon cross-chain)

https://twitter.com/ChainLinkGod/status/1430578760961511424?t=8fC0BXQFHTkQPIHrDK6LGA&s=19

Nobody can directly tell the future, but through retrospection and scoping out what fuels the adoption of a long term global standard, there is a need to fuel it's growth to succeed in the long term, way beyond the memecoins that capture short term attention

Adoption is at the crux of it all, what drives the most value for every ecosystem participant and ultimentally allows a standard within a niche to become a dominant global standard that the entire economy runs upon

Ultimately it helps to zoom out