Deflation in the Caldera ecosystem is achieved through several key features related to its native token ERA:
Transaction payments (gas). ERA is used to pay transaction fees in networks built on Caldera. Importantly, part of these fees is typically burned or permanently removed from circulation. This creates a continuous mechanism for reducing the total supply of tokens, which directly depends on network activity. The more transactions occur, the more ERA tokens are burned.
Staking for network security. To support the integrity and security of the network, node operators and validators must lock (stake) a significant amount of ERA tokens. This temporarily removes tokens from circulation, reducing their available supply in the market.
Governance. The ERA token also gives holders the right to participate in the governance of the protocol. Typically, staking tokens is also required for voting or submitting proposals. This encourages long-term holding of ERA rather than selling it, which positively impacts deflationary processes.
Limited supply. The total supply of ERA tokens is fixed at 1 billion. The absence of additional issuance (minting) is a fundamental prerequisite for a deflationary design. All mechanisms described above work to reduce, not increase, the number of tokens.
📈 Synergy of deflation and ecosystem growth
The deflationary potential of Caldera is closely linked to its success as a RaaS platform. The more projects choose Caldera to create their Layer-2 solutions, the more active the network becomes. This leads to:
The growth in demand for ERA. New projects and their users will need ERA tokens to pay for gas.
Increase in the number of burned tokens. The growth in activity and the number of transactions leads to an acceleration of the burning mechanism.
Increased security. Higher demand for staking to launch new nodes, making the network even more decentralized and secure.
Thus, the unique tokenomics of Caldera creates a positive feedback loop, where the growth of the ecosystem directly enhances the deflationary pressure on the ERA token. This makes Caldera not just a tool for scaling Ethereum, but also a potentially attractive asset for long-term investors.
