⚙️Sources of Inflation & Deflation
Inflationary side (programmatic issuance):rewards, NFT-linked outputs, incentive emissions, and other structured releases.
Deflationary side:LOOP accumulated in the Tax Pool may be periodically burned or time-locked; selected exit paths also include burn mechanics. Together with the savings cadence—Points conversion → LP admission → per-round capacity increases—the model aims to steer demand pressure into LOOP buy-pressure and Tax Pool accruals, while steering market depth into long-term LP supply.
Condensed design credo (the three MUSTs):
Participation must pair with LP→ usage translates into real LOOP demand and Tax Pool accruals.
Income must accrue to the Treasury→budgeting & buybacks execute on cadence within governance guardrails.
Exceptions must be orderly→resolution via linear Points compensation continues until fully settled.
These three institutional constraints form the bedrock of LOOP tokenomics.
Keynesian Element
LOOP Mechanism
Technical Realization
Policy-led fiscal stimulus
Attractive deposit issuance(higher programmatic daily issuance to draw USDT) and DAO profit participation for distribution
Decentralized, contract-enforced execution reduces discretion and bureaucratic lag; budget taps governed by on-chain thresholds, time locks, and audits
Central bank money expansion
Rule-driven issuance/burn via slippage tax / Tax Pool and scheduled buyback-and-burn
Transparent, auditable parameters on-chain prevent discretionary over-issuance; emissions/burns bounded by governance guardrails
Public works to create employment
Governance NFTs and contributor incentives to mobilize community work streams
Tokenized contribution accounting(Points/weights) ties participation → rewards, aligning labor-like inputs with measurable outcomes
Debt-cycle management challenge
Position resolution algorithms plus daily linear compensation for orderly settlement
Mathematized risk sharing dampens herd behavior; state transitions and queues are deterministic, logged, and replay
Policy lag
Condition-based triggers from real-time on-chain telemetry; parameters adjusted within bounds
7-day epoch cadence enables rapid, predictable iteration versus traditional quarterly policy cycles
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