Zero inflation Tokenomics 2.0, how to view valuation and supply logic?
Kava will enter Tokenomics 2.0 starting from 2024/1/1: a fixed total supply of about 1 billion, inflation reduced to zero, and incentives maintained through community treasury and governance distribution. This means that the valuation logic shifts from "issuance - subsidy" to "cash flow - usage."
For the protocol, zero inflation can reduce long-term selling pressure, but it also requires ecological growth and cost capture. If DeAI, native liquidity, and bridging entrances bring higher TVL and fee income, fixed supply can have a "multiplier" effect. Conversely, if growth does not meet expectations, fixed supply does not guarantee price stability.
In addition, officials have recently emphasized U.S. policies and compliance narratives (such as the GENIUS Act and Strategic Reserve), viewing compliance as a "rights premium" to attract institutional demand.
Investors can track three panels:
① Protocol revenue/market cap ratio (P/S) compared to peers
② Treasury scale and distribution efficiency
③ On-chain active contracts and user growth. Zero inflation is a double-edged sword; the key lies in whether it can sustain the "scarcity narrative" through product strength and network effects.
Do you think fixed supply is still an advantage in L1, or should we return to cash flow discounting?
