Analysis of the Deflationary Mechanism in the Token Economics of $WCT

The economic model of #WalletConnect token ($WCT ) constructs a potential deflationary mechanism through a fixed total supply and ecological consumption. Its core logic is reflected in the following three aspects:

1. Fixed Supply and Scarcity Design

The total supply of $WCT is strictly limited to 1 billion tokens, with no further issuance. This design mimics Bitcoin's scarcity model, avoiding inflationary pressure through a hard cap. Currently, the circulating supply only accounts for 18.62% (approximately 186 million tokens), with the remaining tokens being gradually unlocked (e.g., team tokens locked for 4 years), further delaying market selling pressure.

2. Deflationary Pressure Driven by Ecological Consumption

In the future, WalletConnect plans to introduce a MAU (Monthly Active Users) billing model, requiring dApp developers to pay for relay service fees using $WCT. This portion of tokens may be burned or locked, directly reducing the circulating supply. Additionally, the staking mechanism (e.g., node operators needing to lock tokens for a long time) and governance voting (proposals requiring token consumption) also increase the demand for token retention.

3. Cross-Chain Expansion and Demand Growth

As WalletConnect supports more chains like Solana, the practicality of WCT as a cross-chain fee settlement medium increases, potentially driving token demand beyond the release rate. For example, the 5 million WCT airdropped to Solana users must be obtained through ecological participation, indirectly stimulating use rather than selling.

Challenges and Balance: Currently, $WCT has not implemented a clear burning mechanism, and the deflationary effect relies on the actual adoption rate in the ecosystem. If the MAU billing fails to materialize, the token may face inflation risks (e.g., continuous release of airdrops). However, overall, its economic model provides a deflationary foundation for long-term value through scarcity + practicality. @WalletConnect