Tokenomics Are Broken And Only Contribution Can Fix This

Opinion: Naman Kabra, co -founder and CEO of Nodeops

​​For years, stokeing was the gold standard in encryption. Classic codes, network secure and gain simple, elegant and unreliable rewards. Somewhere all the way, we drifted.

Staking stopped contributing and started getting capital. Rewards rewards, emissions exploded and the distinctive symbol has turned from long -term infrastructure support to chasing the short -term return.

Difficult questions were forgotten. What is really rewarded – at what cost? What is the real work that is being done? What happens when the rewards are running out?

We have seen this play closely. Defi protocols are high in the sky. The 1S layer is immersed in incentives to use the boot. The style is always the same: the capital is rewarded, and the contribution is not. He works so that he does not. The capital can raise activity, but it cannot maintain ecosystems. This takes the creation of value. Without it, all you want is a bubble.

When the capital incentives are not only enough

It is easy to sell logic: If users are locked, they are “committed”. If they are participating, they are “insurance”. But deception alone does not tell you anything about participation. He does not say who runs the infrastructure, or who is on board users, who build real applications or who solves real problems. The capital is negative. Networks are not negative. It works to perform.

The main disadvantage in some symbolic economies is that the value is extracted, and has not been created. The first users are salaries with emissions funded by new entrants. There is no basic productivity. And when the request slows down, the entire form collapses under its weight.

Best existing model; It should only be built.

Restructuring the network incentives

What if, instead of defending the capital, we started an effort? What if the symbols were distributed to the size of the wallet, but on a meaningful contribution?

This is the vision behind the distinctive performance -based symbol. Participants who calculate the operating time or operating transactions are rewarded reliably or on the developers and users directly on their impact. The goal is not only the distribution of symbols. It is the alignment of incentives with the actual growth and benefit of the network.

This transformation is already visible through parts of the decentralized physical infrastructure system (DePin). The operators are not compensated for locking the symbols but to stay online, meet reliable standards and provide infrastructure. It is a more sustainable model that allows economic coordination through a verified contribution, not inactive capital.

Related to: Everyone loves the investment funds circulating in encryption, but not after reading the fine printing

The aim is to bypass synthetic synthetic rings and unusual models that depend on emissions and towards the economy based on the rooted use of a measurable contribution. Participation becomes consistent and significant when the participants are rewarded for concrete performance standards such as operating time, cumin and reliability. The formula is clear: aligned incentives with a real output.

This model offers both sustainability and credibility. It enhances ecosystems where rewards are gained, and not inflated – as capital flows towards productivity rather than speculation.

Research from Messari’s 2023 a report“The effectiveness of symbolic incentives in Defi”, enhances the fragility of ecosystems that depend on emissions. The study found that the protocols rely heavily on enlarged symbolic rewards, such as Olymposlau or Sushayoos early, with experience in sharp declines in the total closed value (TVL) once incentives decrease.

On the contrary, the protocols that linked bonuses with real benefit, such as AAVE lending activity or LIDO checking, showed the user’s retention is much higher over time. The report says: “When the incentives are separated from the benefit, the participation collapses at the moment when the return dries,” the report says.

Tokenomics 2.0 is where the design meets the actual value

In essence, most of the distinctive failure is a design failure. Incentives collapse when the difference gives priority to noise in the short term in the long term, and when emissions are dealt with as the revenues and promises of white leaves more than the products can offer.

The solution is not more symbols – it’s best alignment. Symbols must be linked to the results: the infrastructure that is delivered, calculating their implementation, applications that have been published, and solving real problems. In Web2, performance is measured by the main performance indicators. In Web3, they should be coded directly in the distinctive symbol flows.

The ecosystem does not need more information panels. It needs registration boards. Information boards tell you who was imprisoned most. Result paintings tell you about the construction of the network, the contribution and the improvement of the network. In the next era of Web3, symbols should not sit in lethargy in the governor; You should move synchronized with the creation of value. The auditors who remain on the Internet, and the employees of the knots who have reached the standards and developers who ship the members of society and society who lead adopting are the shareholders who must gain and be visible.

This is the shift from negative capital to the active contribution. Stay away from amplifying numbers to measuring the real effect – operating time, performance, participation and delivery. When incentives are associated with work, not only wealth, ecological systems not only grow – they flourish.

The future of symbolic economies is dynamic, accountable and technology. And the teams that are designed with this into account today? They will still stand when the noise fades and emissions dried.

Opinion: Naman Kabra, co -founder and CEO of Nodeops.

This article is intended for general information purposes and does not aim to be and should not be considered legal or investment advice. The opinions, ideas and opinions expressed here are alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.