Just like Bitcoin, Nexa coin’s tokenomics are designed for long-term stability. Many would argue that the first year’s distribution model is too aggressive; others would suggest alternative solutions. But at the end of the day, the creator of the first cryptocurrency designed exactly this model, and we need to understand the reasons behind it.
In this article, we will review how Bitcoin and Nexa coin tokenomics models are the same and what kind of long-term vision they share.
Early Inflation
During the first four-year cycle, or 1,050,000 blocks in the case of Nexa, there is a huge supply inflation of 50% of the overall coin supply. This means that miners are well rewarded for their work and securing the network; however, it drastically impacts the market and conditions during the first years.
The whole idea is not to gain value appreciation, but to distribute the coins as widely as possible over a period of time. This is why Bitcoin halves approximately every 4 years.
At the time of writing, Nexa is approaching its first halving and will mark the end of its first four-year cycle. Coin rewards for miners will also halve, and during the next four years, only 25% of the coin supply will be distributed to the miners.
Long-Term Distribution
The cryptocurrency industry has already witnessed the impact of short, pre-market accumulation of coin supply in the hands of a few or a single entity, leading to centralization, a short-lived cycle, and many other problems. However, Satoshi himself invented a genius model to fairly distribute coins over a period of time to miners and network participants.
Long-term distribution of coins over a decade or a similar period creates a mature environment for cryptocurrency to thrive. This is exactly what Bitcoin did, and what Nexa is doing now. The major part of coins is designed to be distributed over more than 12 years, which takes three halving cycles and brings the overall supply to 87.5% mark.
Predictable Supply
In today’s world, inflation is causing significant pain for the average household worldwide. Many are aware that the current financial model cannot sustain for much longer and that changes are needed.
One of the most important aspects of Nexa coin tokenomics is a predictable supply. From the inception, it is known how many coins will be mined, when, and how they will be distributed.
Predictable supply removes the layer of never-ending inflation, unfairness, and centralized control. With cryptocurrency, everyone can run a node, run the network, mine, and use it without anyone’s permission. No one can print it out of thin air, no one can counterfeit it; only fair work and mining can reward you with coins.
Conclusion
The 21st-century world economy is rapidly changing, and with the creation of cryptocurrency, it has also released another powerful jin from a bottle. And this jin is a predictable monetary supply model that can change the game and the old system. The rest depend on us–users, miners, and cryptocurrency enthusiasts.