3.11. Deflationary Ecosystem
In the modern world, stock market pricing is often determined by the speculative phenomenon known as the “greater fool theory.” The valuations of many companies are significantly disconnected from their fundamental indicators (P/E, P/S, P/B, D/E) and rely more on investors' expectations that the next buyer will purchase the asset at a higher price.
This phenomenon is even more pronounced in the cryptocurrency market. While companies on the stock market often provide real value to end users, this is rarely the case for cryptocurrencies. Most crypto assets grow in price not due to real demand for a product or technology, but due to investor greed. Bitcoin, despite being a revolutionary technology, has no direct connection to end users. Investors acquire it with the sole intention of selling the coins to the “next buyer” at a higher price.
The Deflationary Ecosystem addresses this issue. Unlike most cryptocurrencies, where asset value is sustained only through speculation, demand for DeflationCoin is created not just by investors but also by end users interacting with the ecosystem’s products. In this model, investors profit from the growing demand for the ecosystem’s products rather than from playing the “greater fool game,” making the system more ethical.
Modern crypto projects at the L-1 and L-2 levels often promote complex technical solutions that remain disconnected from end users. These technologies rarely find practical application in real life, and their value is often unsubstantiated by consumer demand. In contrast, DeflationCoin focuses on creating a digital ecosystem where real consumers play a central role. Demand for the coins arises from the use of the ecosystem's products and services. This is a key difference from many other crypto projects, which focus solely on attracting investors while masking useless blockchains with slogans about cutting-edge technology.
The Deflationary Ecosystem operates as an online holding company whose activities span various areas of online business. A portion of the profits is directed toward buying back and burning coins, increasing demand for the coins and reducing their overall circulation. This model is reminiscent of “taxes” paid by businesses to governments, but in this case, these “taxes” are used to reduce the circulating coin supply and ensure long-term deflation, rather than being funneled into the pockets of corrupt and self-serving elites who plunder budgets, as is often the case in many countries.
Each element of the ecosystem will be built on the following key principles:
Direct interaction with end users and a focus on mass-market segments rather than creating complex and inefficient technical solutions.
A portion of the monthly profits from all online segments will be allocated to buybacks of DeflationCoin tokens.
A portion of the repurchased tokens will be burned to strengthen deflation and reduce the circulating supply.
Another portion of the repurchased tokens will be distributed as monthly dividends to all participants in smart staking.
Concept for the monthly profit distribution of ecosystem elements::
80% is allocated for reinvestment and development of the ecosystem element to scale it, capture a larger market share, and increase total revenue and profits.
20% is allocated for DeflationCoin buybacks and distributed as follows:
5% — Buyback and subsequent burning of tokens to reduce supply and enhance the asset's value.
5% — Buyback of tokens for dividend distribution to DeflationCoin stakers.
5% — Buyback of tokens for proportional distribution among the managers of the ecosystem element. (Each element is managed by two directors focusing on different areas: one specializes in technical infrastructure, while the other focuses on strategic marketing, product concept, and financial reporting.)
5% — Buyback of tokens for distribution among team members working on this ecosystem element. Decisions regarding payouts are made by the two managers of the respective element.
Important Notes!
This distribution model serves as a baseline framework and may be adjusted for each ecosystem element. The specific scheme is determined based on the direction's characteristics, market conditions, and strategic goals. This approach allows the ecosystem to adapt to the nuances of each sector and enhances resource management efficiency.
To improve liquidity, token buybacks will be conducted using limit orders throughout the month via the "Basket and Pump" mechanism.
During periods of global crises or bearish trends in the crypto market, the share of funds allocated for DeflationCoin buybacks may increase from 20% to 80%. This emphasizes the token's status as the "least correlated asset on the crypto market" and attracts investors looking to preserve their capital.
One of the first products of the Deflationary Ecosystem will be "Educational Gambling," which will operate based on all the principles outlined above.
Last updated