The stake pool protocol on Solana is preparing for its upcoming IDO by providing solutions for “problematic tokenomics.”
Traditional Tokenomics Challenged
Socean Finance, in preparation for its Initial DEX Offering (IDO), has started a series of primers on tokenomics and what “every Solana DeFi project” is doing incorrectly.
The first part of the series talks about three of the biggest mistakes that projects are making in the tokenomics structures:
Launching without clear token utility.
Launching too low of a supply.
Emitting too much supply through liquidity mining.
“Many projects launch with an artificially low supply (<5% of total supply). It’s tempting for many projects to do this as it generates hype and makes the protocol look attractive (Look Ma! We have a 1B market cap!),” mentioned the protocol in an official Medium blog highlighting the flaws in supply distribution of tokens. “This tends to play out predictably, however: the price starts off incredibly high due to hype/FOMO and artificially low supply, then quickly begins to fall as a high emissions-to-initial-supply ratio results in >100% yearly inflation.”
In order to address the issues with existing tokenomics structures, the protocol has introduced a new product on Dec. 28 called Socean Streams. This product allows users to buy governance token vesting contracts that would unlock governance tokens over some time. The delay is incentivized by offering a discount on the tokens.
What is Socean Finance?
Socean is a stake pool built for the Solana blockchain network. The team behind the protocol plans to eventually convert Socean into a fully autonomous, data-driven, algorithmic stake pool. The objectives of the stake pool are listed below:
Unlock the utility of staked SOL in the Solana ecosystem.
Enhance staking returns.
Improve the efficiency of monitoring and managing stake.
Validators to be rewarded in a meritocratic and transparent manner.
Retain Sybil resistance while increasing decentralization and censorship resistance.
Find more about Socean Finance here:
Source : solana.news