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Yesterday, we shared a thread on $HNT economics and the burn-and-mint model. This graph demonstrates what the burn-and-mint model is intended to look like. But what does inflation rate mean, and what does it mean for the supply and demand of the network?
$HNT supply comes from mining with a compatible Hotspot that both mines $HNT and creates #LoRaWAN network coverage for #IoT devices. All $HNT was mined from genesis, and gets created at a fixed 5M/mo rate.
Data Credits reflect demand based on usage of the network. To create DCs, $HNT must be burned from circulation. DCs are non-transferable or resellable, and can only be used for data transmission on the network.
As usage increases, more $HNT will burn from circulation, decreasing the inflation rate. Moving forward, we expect more usage of the network driving deflationary pressure, and continually reducing the circulating supply of $HNT.
This may be the only two-sided economic model in #crypto that actually has IRL applications. The rationale for doing it this way is to create economics based on utility and provide an affordable network for new #IoT applications to come to realization.
