LA Deflation Model Explained: How Does the Destruction Mechanism Drive Up Coin Prices? @Lagrange Official

Lagrange (LA) strengthens token scarcity and promotes value growth through the design of a multi-layered deflation mechanism, with its core logic revolving around the destruction mechanism and supply-demand restructuring.

1. Direct Deflation Effect of the Destruction Mechanism

LA adopts an on-chain income repurchase and destruction strategy, using 20% of protocol income (such as transaction fees, zkML service fees) to periodically repurchase tokens from the market and transfer them to the black hole address for permanent removal. This operation directly reduces circulation; if demand remains stable or grows, the scarcity of remaining tokens will drive prices up. For example, similar to BNB's quarterly destruction, which has often triggered short-term market expectations of price increases.

2. Indirect Deflation of Staking Lock-up

In conjunction with the EigenLayer re-staking mechanism, $LA encourages users to stake tokens to earn node rewards (current APR is approximately 20%), with 34% of the circulating supply locked. Staking reduces market selling pressure, while the destruction mechanism further compresses the circulating supply, creating a supply-demand imbalance of 'low circulation - high demand', supporting long-term price increases.

3. Long-term Value Capture of Ecological Consumption

LA's zkML co-processor requires tokens to pay for proof fees, with part of the fees being destroyed. As AI and cross-chain applications grow, the demand for tokens as 'fuel' increases, leading to a simultaneous rise in destruction volume, forming a positive cycle of 'using is deflation'.

Conclusion: $LA has constructed a scarcity narrative similar to Bitcoin's halving through the triple deflation model of destruction, staking, and ecological consumption, but it is necessary to pay attention to the impact of market sentiment and technical implementation progress on short-term fluctuations. #Lagrange