Recently, Orion Protocol announced the transition of its $ORN token to $LUMIA, a change that will bring with it a significant increase in the total supply, going from 92.6 million to 238.8 million tokens. This increase of almost 2.58 times can generate a significant dilution in the value of the token and is worrying many investors.
The key question is: why this increase? According to the whitepaper, the change seeks to adapt to the growing demand for real-world assets (RWA) and improve interoperability in DeFi and Web3. The idea behind this move is to increase the liquidity and efficiency of the system, allowing users to better participate in the Lumia ecosystem, which aims to pioneer the tokenization of real assets.
However, any increase in supply carries the risk of devaluing the existing token. While new functionalities and expansion in protocol adoption are expected to offset this risk, in my opinion, it is vital that investors carefully assess how this change will affect the supply and demand of the token in the market.
Conclusion: While the increased supply is intended to improve the infrastructure and attractiveness of the Lumia protocol, investors should keep an eye on how the new tokens are managed and whether demand will be sufficient to sustain the token price after dilution.
🟡 For more information, check out the official announcement ⚫
https://www.binance.com/en/support/announcement/binance-has-completed-the-orion-orn-mainnet-swap-and-rebranding-to-lumia-lumia-2503fe9fb59b415fb89773f60692eb95
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