It's probably useful to understand the other side of $DOT's planned inflation adjustment and their arguments on why it may not work.
The scenario is simple -- a hard pressure inflation adjustment may encourage validators and nominators to stop staking and sell their coins. This may bring the coin to a price that new investor buy-in cannot recover. There has been real-world evidence of this -- a lot of coins have tried to adjust their inflation to hopefully recover their prices, but none worked well. $DOT has also tried once already in 2024.
It's probably only possible to design a correct initial allocation and inflation plan during the coin launch. It's also important not to be too greedy -- coins where founders hold too significant holdings usually do not perform well. After-thought changes, on the other hand, usually face significant problems from existing holders because they will adjust their behavior and sell more. This renders the adjustment ineffective.
3.28K
6
The content on this page is provided by third parties. Unless otherwise stated, OKX is not the author of the cited article(s) and does not claim any copyright in the materials. The content is provided for informational purposes only and does not represent the views of OKX. It is not intended to be an endorsement of any kind and should not be considered investment advice or a solicitation to buy or sell digital assets. To the extent generative AI is utilized to provide summaries or other information, such AI generated content may be inaccurate or inconsistent. Please read the linked article for more details and information. OKX is not responsible for content hosted on third party sites. Digital asset holdings, including stablecoins and NFTs, involve a high degree of risk and can fluctuate greatly. You should carefully consider whether trading or holding digital assets is suitable for you in light of your financial condition.