Gregory and I attended a Blockscience retreat this weekend. Zargham, the founder of Blockscience, suggested that Regen Network consider shifting to a fixed cap, dynamic supply tokenomic schema.
Why fixed cap?
We’ve begun hosting a series of gatherings focused on the REGEN token called Ethical Capital Formation. Tokenholders want to understand the economic primitives that govern tokenomics. One of the most iconic numbers in crypto is 21 million: the fixed cap of Bitcoin. To draw an ecological analogy: a fixed cap is akin to carrying capacity—the upper limit of population or resource use within a given ecosystem or context.
Why dynamic supply?
After fixed cap, what is the next most iconic economic primitive in crypto? Deflationary. Ethereum, the number two crypto asset, has driven this narrative through token burning via transaction fees as a result of Ethereum Improvement Proposal 1559. The Ethereum community has since coined the term “ultra-sound money” to encapsulate the effects of the deflationary supply narrative. And yet Ethereum has actually slid back into a net increase in token supply since the initial passage of EIP 1559 in August of 2021. Why is this? Burning rate is determined by fees, and minting rate is determined by block rewards; there isn’t an algorithm linking these two factors to result in a homeostatic system.
To take more traditional comparisons, gold is an approximately fixed-supply asset (while more is being mined, the more we mine the more expensive it is to mine more), while the Federal Reserve and the dollar are based on dynamic supply.
Fixed cap plus dynamic supply is the best of the both worlds. It gives token holders an assurance about long-term economic policy, while also allowing for an economic model that is responsive to real-world de
I really want to thank Will and Zargham for putting together this proposal. There has been a lot of discussion about this proposal in the Token Econ WG telegram channel, but it looks like I am going to be the first to share thoughts here in the forum.
I have long been skeptical of most proposals about token economics upgrades. Fundamentally I believe that most of the challenges $REGEN faces in the market have to do with narrative and the challenges of slow and ethical value creation in a hyper competitive market dynamic.So it may come as a surprise to many that I find this proposal incredibly compelling and exciting.
I believe this design, or something like it, can serve to more deeply link the reality that all of $REGEN’s value fundamentally is derived from the ability of our network to produce ecological assets (In the form of eco credits first, and in other forms later). This type of design, which creates a cap, but also allows for dynamic minting and burning parameters, gives us both a strong narrative that investors and community members can understand related to the supply cap, but also gives us the tools we need to manage our rate of both minting and burning to ensure we can provision key network utility areas (security of course, but beyond that data provision, community engagement and marketing and beyond) and link token burning to key activities (eco credit sales, retirements and minting being the most discussed places to link burning, with ecocredit class creation already burning 1000 ecocredits per credit class, and the new 2% of value burn to go into effect in the next major network upgrade).
Here is my bull case for the model: Anchoring Ethical Capital Formation: The Case for a Fixed Cap, Dynamic Supply in $REGEN Tokenomics | by Gregory Landua | Medium
Now let’s dig into some details and talk through some of the more important questions we need to ask, design we need to do, and problems we might face.
Re: Fixed Cap, Dynamic Supply - Taking the Next Steps
Thank you Will for sharing this well-researched proposal. The fixed cap with dynamic supply model presents an elegant balance between economic stability and adaptability. I’m particularly interested in the implementation details of how we integrate these tokenomics parameters with our existing infrastructure.
Essential Parameter Considerations
The proposed regrowth rate (r), which encodes the half-life of the supply gap, deserves significant community attention. As Zargham’s equation shows:
S[t+1] = S[t] + r(C-S[t]) - B[t]
This creates a self-stabilizing system where:
- As supply approaches the cap, minting naturally slows down
- The burning rate provides a counterbalance to minting
- Staking and ecological factors modulate the regrowth rate
The beauty of this model is its inherent stability - the fixed cap prevents runaway inflation, while the dynamic supply elements provide flexibility and responsiveness to network conditions.
Integration with Existing Infrastructure
Looking at our codebase, I see several natural connection points where these parameters could be implemented:
Staking Integration
The regrowth rate formula includes a staking component:
r = 0.02 × (1 + S_staked/S_total) × (1 - ΔCO₂/50 ppm)
This should integrate with the Cosmos SDK’s x/staking module, which manages delegation of tokens to validators. The TokenomicsParams structure would need to query the staking ratio:
message TokenomicsParams {
// base_regrowth_rate is the baseline regrowth rate (r)
string base_regrowth_rate = 1;
// staking_multiplier_enabled determines whether staking ratio affects regrowth
bool staking_multiplier_enabled = 2;
// ecological_adjustment_enabled determines whether ecological data affects regrowth
bool ecological_adjustment_enabled = 3;
// ecological_reference_value is the reference value for ecological adjustment (e.g., 50 ppm)
string ecolog
Ok. seems like Commonwealth is glitching hardcore right now, and my response keeps getting cut off. I have included my full response here for now: $regen dyanamic and fixed supply post - Google Docs
Side note, this leads some credibility to @Paul Weidner 's points about the challenges of Commonwealth. I love the integration with token addresses and governance, but if I cannot share a forum post…that’s an issue.
tokenomics and regenerative movement has a lot of motion, prompt
