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Tokenomics – the economic rules that govern a cryptocurrency – are crucial for understanding its behavior and value.
The OM token's story is particularly interesting, as it involves a significant shift from one economic model to another.
The OM token's journey began on the Ethereum blockchain, where it was initially launched as an ERC-20 token.
To put it simply, an ERC-20 token is a standard type of token that's compatible with the Ethereum network.
Think of it like a digital asset built to fit within a popular and well-established online platform.
In this first phase, the OM token had a fixed supply. This means that there was a maximum, unchangeable number of OM tokens that could ever exist, similar to a limited-edition collectible.
However, as MANTRA prepared to launch its own independent blockchain (the MANTRA Chain), a decision was made to overhaul the OM token's economic structure.
This led to some fundamental changes:
OM transitioned from being an ERC-20 token on Ethereum to becoming the native token of the MANTRA Chain.
This means it became the primary token used to pay transaction fees and participate in the chain's operation, such as staking to secure the network.
The tokenomics shifted from a fixed supply to an inflationary model.
Instead of a hard cap, the number of OM tokens in existence can now increase over time.
This is similar to a central bank printing more money, and the rationale is often to incentivize participation in the network.
The initial total supply of OM tokens was doubled. This means that the number of tokens in existence was significantly increased at the launch of the MANTRA Chain.
MANTRA's team argued that these changes were necessary to ensure the long-term sustainability and functionality of the MANTRA Chain.
For example, the inflationary model was introduced to provide ongoing rewards to the validators who maintain the network.
However, these tokenomics changes also sparked controversy and raised concerns within the community, which we'll delve into later.
Disclaimer: This information is for educational purposes only and is not financial advice. The goal is to help you learn and explore the world of investing, but please remember that all investments come with risks, and there are no guarantees of profit. Conduct your own thorough research and consult a financial advisor before investing. Past performance is not indicative of future results.
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