@QredoNetwork's Tokenomics is going to be highly deflationary.

To truly appreciate this, one needs to view it through the $QRDO 'ecosystem' lens, when the network is operational at scale.

Here are 8 highly probable (& some speculative) deflationary catalysts we can expect 🧵👇🏽
1. The ultimate metrics: AUM & MAU (monthly active users)

Qredo's entire ecosystem is built on the foundation of groundbreaking dMPC technology.

This is what enables the custodial infrastructure, attracts billions of dollars & will make Tokenomics highly deflationary.
With a low to moderate amount of AUM and network activity, Tokenomics may seem inflationary.

With a moderate to high amount of AUM, Tokenomics will take on an exponentially growing deflationary character.

Why?

Because of simple math & the design of the ecosystem.
2. Market Makers (MMs)

The first big piece of the puzzle is the MMs.

They need to stake an amount of $QRDO alongside other digital assets.

For perspective on the value they could potentially stake, @wintermute_t, a MM, trades around ~6b daily.
Qredo currently has ~8b AUM and 46k MAU:

That would mean that MMs will need to stake enough tokens to handle billions in transactions on @QredoNetwork.
As $QRDO attracts more assets onto the network, the staked amounts from MMs (unknown) will need to increase significantly in proportion to the economic activity.

I wouldn't be surprised if the staked value is in the 8-10 figures or more (a portion of which will be in $QRDO).
With staked value in that range, MMs would eat away at the circulating supply fairly easily.

Additionally, there's the incentive for MMs to hold Qredo, as some like Wintermute are also strategic investors.



But that's just one of the big pieces.
3. Validators

Similar to MMs, validators are a big part of the network & need to stake a growing amount of $QRDO proportionate to the AUM.

With around 21 validators in 2022, imagine having to stake just ~$1m Qredo each (arbitrary illustrative number).

That's ~$21m removing ~10m tokens (at $2) from circulation, which is ~25% of the current circulating supply - causing immense buying pressure.

Note also that assets can flow into the network suddenly through adoption but circulating supply will only progressively grow.
There's also an upcoming buyback program, which could be a portion of validator rewards flowing into buying back $QRDO tokens.

Plus, $QRDO holders can also add to validator pools in the future to share in the high validator reward model: qredo.com/qredo-white-pa…
4. Borrowers

Borrowers have to stake to borrow on the network. The borrowed amount can be re-staked too, as mentioned in their white paper, increasing yield for borrowers.

The QRDO tokens still earn yield, making it the most secure way to custody, borrow, & earn double yields.
5. Liquidity providers (LPs)

Somewhat connected to MMs, LPs have to stake a large value of assets, a portion of which will also be $QRDO.

With the upcoming liquidity hub and OTC dark pools in the roadmap, the amount of LPs' staked amounts will need to significantly increase.
For perspective, OTC trading volume is 2-3 times the size of the volume in exchanges: atlantis-press.com/proceedings/ic…

Yes, almost 300% of the value that passes through exchanges will most likely move through @QredoNetwork in the future.
5. Ecosystem fund (EF)

The EF has tokens that never enter the circulating supply: qredo.com/blog/coinmetro…

Instead, developments from the ecosystem partners will lead to more influx of capital, leading to higher AUM and MAUs, catalysing network effect.
6. Treasury buyback

A speculative one could also be buybacks from Qredo's treasury to support validator pools in the event of an unpredictably large influx of assets and transactions.

Buybacks could potentially apply to allocations for future projects in the DAO too.
7. Burning & vaulting

Token burn or vaulting mechanisms could also be put in place to deflate the supply, though this is also speculation.

Considering the novel L2 middleware token architecture, I'm not particularly certain about the technological impact of such mechanisms.
8. Partnerships/integration

Lastly, with ecosystems like $LUNA, $SOL etc. integrating & onboarding institutions, alongside exchanges adopting Qredo's custody wallets, we can expect a massive influx of funds onto the network.

As a result, network effect will kick into high gear.
Overall, @QredoNetwork seems to be building an ecosystem to attain a point of immense network effect through the various elements mentioned above.

It's also evidenced by their steadily increasing no. of wallets even during a big dip in the market:
To summarise, the following elements in the ecosystem (which incl. some speculation) could create a large deflationary effect on the circulating supply:

1. AUM & MAUs
2. MMs
3. Validators
4. Borrowers
5. Ecosystem fund
6. Treasury buyback
7. Burning & vaulting
8. Partnerships
All the points above are designed to work symbiotically with each other.

So much so, that with their significantly higher future AUM, the token price has to increase exponentially to handle the network activity and the demand for $QRDO tokens by the ecosystem.
With the points above, along with the other key points I highlighted in the thread below, I wouldn't be worried about the progressive increase in the circulating supply of $QRDO tokens.

,
Finally, as I'm not an insider or a paid influencer, all of these are my personal opinions based on research.

Always do your own research as this is not financial advice.
To help others understand the $QRDO ecosystem better:

1. Retweet the first tweet below.

2. Like and share your thoughts!



#QredoArmy

• • •

Missing some Tweet in this thread? You can try to force a refresh
 

Keep Current with Sharavana Rao

Sharavana Rao Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @sharavana_rao

Jan 18
@QredoNetwork is the most important tech to arrive for the decentralized crypto world, after $BTC, $ETH, & $LUNA.

Here are 50+ strong fundamental reasons why $QRDO will transform the crypto world as we know it.

Save this thread to revisit as I keep it updated. Here we go 🧵⬇️
1. Product developed over ~3 years
2. Team went to VCs with working product
3. Project is not just a whitepaper
4. Pioneered decentralized MPC (dMPC): qredo.com/blog/what-is-m…
5. Combined MPC with L2 blockchain
6. Tech is available on an open-source basis
7. ~8B AUM⬇️

/1
8. The only tokenized dMPC provider
9. No real competitors
10. dMPC prevents private key loss
11. dMPC puts an end to exchanges being hacked and people losing their life savings
12. 7 layers of defense: qredo.com/blog/key-fu-cr…
13. Safest digital asset custody globally

/2 ⬇️
Read 13 tweets

Did Thread Reader help you today?

Support us! We are indie developers!


This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Too expensive? Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

:(