Over the past two months, we have been optimizing our resource allocation and inflation management strategies. How are we doing? The on-chain inflation rate has dropped to 3.9% and continues to decline. These adjustments are not trivial; we are breaking old models and striving to build the most sustainable, self-sufficient Layer 1 blockchain economy in the Web3 space.
Next, let's talk about the changes happening and why this is significant for every WAX user.
Model Transformation: Shifting from Inflation to Destruction
WAX has always prioritized accessibility and high performance. Now, we are innovating our resource model to adapt to future developments.
Starting point before model transformation
90% of on-chain resources obtained through staking
10% obtained through 'PowerUp' mechanism
Endpoint after model transformation
90% of resources will be obtained through 'PowerUp'
10% obtained through staking
Currently, the ratio of 'PowerUp' to 'staking' is about 60/40, and we will not stop until we achieve the goal of 90/10. This shift is not just about improving efficiency, but also about building a blockchain network driven by real usage and activity (rather than merely locked digital currency).
Simply put, more 'PowerUp' means less new digital currency issuance, which also means more WAXP is being destroyed.
September 2025: An important milestone for deflation
As mentioned in our recent article (Simplifying Management and Funding: A New Chapter for the WAX Blockchain), we will gradually phase out the last stage of the 'Guild Reward Parachute' by September 2025.
Once this initiative is complete, the inflation rate will be reduced by another 1%, bringing the WAX network closer to zero inflation or even complete deflation, depending on actual usage.
In the future, we will rely more on actual usage to meet network operational needs rather than funding on-chain activities by minting new digital currency. This is a bold move, and few other blockchains are willing (or able) to take this step.
Building a blockchain that operates like a business
Most blockchains rely on endless inflation to operate, but we do not agree with this approach. We are building a network that can achieve self-sufficiency through actual usage, just like any healthy business.
This is the key significance of 'PowerUp'. It allows users to pay small fees for each transaction without locking up a large amount of WAXP. These fees will be paid through our variable inflation system, and unused inflation digital currency will be destroyed, thus reducing the supply of digital currency and enhancing its value.
We are committed to creating a self-sustaining, usage-driven economic system aimed at achieving long-term value.
What is the future of the staking mechanism?
Although 'PowerUp' is gradually becoming the preferred way to acquire on-chain resources, the staking mechanism still plays an important role in the WAX ecosystem.
Although it is no longer the most effective way to drive transactions, it remains the only way to earn voting rewards, currently offering an annual interest rate of up to about 9%. By staking and voting for block producers, you not only support the development of the WAX network but also earn generous rewards. Therefore, you can use 'PowerUp' for transactions, but if you wish to increase your WAXP holdings, consider continuing to participate in staking.
Why this is significant
This is by no means a simple backend upgrade, but a comprehensive overhaul of the operational model of blockchain digital currency economics:
Sustainability: We actively reduce inflation rather than allowing it to expand endlessly.
Usage-driven: Network activity powers the infrastructure, rather than relying on speculative behavior.
Fairness: Fees are charged based on usage rather than the amount of digital currency held.
Scalability: This model is designed to grow with increasing adoption rates rather than collapse due to rising adoption rates.
We are building a blockchain that operates like a business and rewards users who utilize it.
WAX sets a new benchmark for sustainability in Layer 1 blockchains. We are building a future where the usage of digital currency drives the destruction of digital currency, eliminating the need for inflation, and the network thrives on activity rather than being bogged down by endless supply.
Let us work together to create the future.
Join the WAX community!
Official Website: https://www.wax.io
X/Twitter: https://x.com/WAX_io
Discord: https://go.wax.io/Discord
Cloud Wallet: www.mycloudwallet.com
*Friendly Reminder: This article is for informational purposes only and does not constitute any investment advice!
