A Competitive Economic Framework for MultiversX: Toward Revenue and Reflexive Value Accrual

[robert]

Abstract

This paper outlines the evolution of the MultiversX economic model, transitioning from a capped-supply model to a tail-inflation model with a burn mechanism. This new design is engineered to ensure the network’s long-term security, and stimulate vigorous network growth. The proposed changes target a set of concrete and instrumental outcomes: (a) attract new liquidity, (b) increase network usage, (c) generate material revenue at the protocol level, (d) create an economic model to drive reflexive value accrual and (e) forge a direct, unbreakable link between network utility and a perpetual demand for EGLD.

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Preamble

MultiversX is lean, possesses runway for several years of operations, and is among the most technologically advanced Layer 1 blockchains. Yet, every network must evolve to reach its full potential and there are moments when bold, coordinated action can spark significant growth. MultiversX stands at such a moment.

What single, decisive action could set the entire economic engine in motion?

We propose a targeted, milestone-based mechanism to unlock new economic energy across the ecosystem for investors, users, validators, builders, and new entrants:

1. Target 1: Capital Inflow
   a. Net new capital inflow: Attract >100 Million USD in net new capital inflow
   b. Idle capital conversion: Attract >20% of idle exchange supply and convert it to active onchain stakers
   c. Tighten liquid supply: Increase staked capital > 65% to strengthen network security and lower circulating supply
   d. Strengthen participation: Increase monthly active delegates > 50,000
   e. Boost onchain activity: Channel >30% of staked EGLD into productive yield strategies, compounding ecosystem growth through active participation.

2. Target 2: Revenue Growth
   a. Revenue engine: Grow network revenue by 100x; begin with a target of $100k/day
   b. Entrepreneur growth: Grow number of entrepreneurs to >1,000
   c. App growth: Grow number of apps to >1,000
   d. Activity and engagement growth: Grow number of monthly active users to 1m

3. Target 3: Competitiveness and Reflexive investments
   a. Maintain frontier protocol capabilities in terms of speed, bandwidth, revenue
   b. Create virtuous economic cycle via buybacks, strategic investments, and real-world asset strategies

Solution mechanisms:

1. Introduce a general annual emission rate, which provides a robust budget for (I) competitive staking rewards and network security, (II) active yield incentives, (III) ecosystem and network revenue growth, and (IV) competitive protocol development.
2. Couple this with novel fee market structure which directs 90% of base transaction fees to builders, burns the remaining 10%, and opens a priority fee market for validators, meant to drive 10x in revenue and usage.
3. Leverage the above with a community-driven growth fund that ensures the long-term alignment of incentives and desired outcomes for builders, users, and investors of the network.

By refining incentives, reallocating resources with precision, and introducing mechanisms that capture and reinvest value, the framework is designed to accelerate liquidity, expand usage, and increase protocol revenue. These outcomes, taken together, establish a durable path for EGLD value accrual and long-term ecosystem alignment.

This is a deliberate evolution: proactive, competitive, and aimed at ensuring MultiversX can scale into new markets and harness new growth for years to come.

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1. The Economic Evolution: From Scarcity to Sustainability

The foundational economic model of MultiversX was predicated on a capped maximum supply, a design that effectively established initial scarcity and a clear value proposition. However, for a Layer 1 protocol to achieve true longevity, its economic architecture must guarantee a perpetual security budget. A finite issuance schedule eventually forces a network to rely solely on transaction fees to incentivize validators, a revenue stream that can be volatile and potentially insufficient to secure a global-scale infrastructure.3

Core Principles of the New Model

The new economic framework is built upon two foundational and complementary principles designed to create a robust, self-reinforcing system:

1. Robust Perpetual Security: At the core of any L1 protocol is the non-negotiable requirement for unwavering security. The new model commits to a permanent, reliable, and predictable security budget funded by a low, constant rate of tail inflation with a burn mechanism.
2. Productive Value Accrual: The second principle mandates a transition from value derived from passive scarcity to value created through active, usage-driven economic productivity. It establishes that all economic value generated by the network’s core functions and protocol-owned applications must be programmatically and transparently channeled back to the native asset, EGLD. This is achieved through a systematic buyback mechanism, creating a direct, quantifiable link between the protocol’s utility and the value of its token. As the MultiversX economy grows, this mechanism ensures that EGLD holders are the primary beneficiaries, transforming every new application and transaction into a source of structural, programmatic buy-pressure for the native asset.

The Economic Flywheel Concept

These core principles combine to create a dynamic system best described as the Economic Flywheel. This flywheel conceptualizes the MultiversX economy as a perpetual motion engine, where each component reinforces the others, leading to compounding growth and value creation. The flywheel operates in four distinct, interconnected stages:

1. Secure the Base: The process begins with the foundational layer of long-term economic security. The tail inflation model is designed to provide a constant and reliable incentive for validators, ensuring the network remains robust, decentralized, and trustworthy. This is the bedrock upon which all other economic activity is built.
2. Incentivize Growth: With a secure foundation, the protocol aligns the incentives of users and investors to stimulate ecosystem development through an economic partnership with builders. A 90% builder revenue share provides a powerful, direct financial incentive for the creation of high-value, revenue-generating applications. This attracts top-tier talent and capital, fostering a rich and diverse application layer where eGLD is the indispensable unit of account and primary collateral.
3. Capture Value: The proliferation of valuable applications and services drives onchain activity, generating a steady stream of protocol revenue. This revenue is captured from a wide range of sources, including transaction fees, token issuance fees, and earnings from protocol-owned liquidity and applications.
4. Reinforce the Core: This captured revenue is then programmatically converted into EGLD through open-market buybacks and direct conversion into liquid staked EGLD via transparent, time-weighted, non discretionary open smart contracts.

This flywheel model transforms MultiversX into a self-funding, self-sustaining, and self-reinforcing economic system, designed to thrive and grow in perpetuity.

II. A New Emissions Model: Engine for Security and Growth

To ensure the network’s long-term security and incentive alignment, MultiversX will adopt a tail inflation model with a burn mechanism.

A. Inflation Rate and Burn Mechanism

The protocol will implement a decaying inflation with an increasing burn mechanism. This solution provides a predictable and sustainable budget for critical network functions as well as a new mechanism to attract new liquidity and incentivize long-term capital alignment and growth. This decision is data-driven. Over four years of network operations show a direct correlation between token emissions and measurable ecosystem growth. Conceptually, this model mirrors the successful economic strategies of the 20th and 21st centuries, where growth was catalyzed by directing capital inflows and expansionary policy toward innovation and productive enterprise.

The framework presents an opportunity to enhance sustainability through demand-driven emissions, this introduces a refined emission model starting at a *8.757% maximum theoretic inflation for the first year, adaptively decaying toward a *2-5% floor based on verifiable KPIs including aggregated DeFi activity (TVL and volumes), a 65-70% staking ratio for security, revenue proxied by onchain burns, with moderated weighting to account for volatility. It employs a phased formula that slows decay above 5% during high-growth phases and enables bidirectional adjustments when inflation is under 5%, in order to curve emission according to growth.

*The theoretical maximum can never be reached, as every transaction will burn from the supply, furthermore 40% of the emission is locked in case there is no measurable growth.

KPI Selection and Aggregation for Demand-Driven Adjustments (technical expression)

To make inflation responsive, four KPIs are selected: DeFi activity (aggregated TVL and volumes), staking ratio, protocol revenue via burns, and price growth. These metrics are onchain verifiable, with quarterly evaluations using 3-month rolling averages to smooth volatility.

• Staking Ratio: Targets 65-70; current ~49-50% (14.2-14.3M EGLD staked, avg APR 6.5%). Score: (Ratio - 50%) / 20%, clamped 0-1.

• Protocol Revenue via Burns: Burns (10% of base fees) proxy revenue, reflecting transaction-driven deflation. Target >10% QoQ growth; pre-implementation data from Q3 2024 shows stable fees. Score: Growth / 10%, normalized.

• DeFi Activity: Aggregates TVL (locked capital) and volumes (circulation) to capture ecosystem depth and velocity. Formula: DeFi_G = 0.6 × (TVL_growth / 10%) + 0.4 × (Volumes_growth / 15%), clamped 0-1. As of October 2025, TVL is 80.32M,with 24h volumes 628K and 7d volumes 4.48M. Base case target 250M TVL, 10M 24h volumes.

Composite G = 0.3 × DeFi_G + 0.3 × Staking_G + 0.4 × Revenue_G. This weighting prioritizes ecosystem metrics over market signals, aligning with tokenomics best practices where revenue and activity drive sustainability.

Inflation Adjustment Formula

The model employs a phased decay model, ensuring slow decay in high-growth phases and faster in low, with bidirectional flexibility at lower levels:

• High-Rate Phase (Inflation > 5%):
  • Inflation{t+1} = max(5%, Inflation_t - 0.25% × (0.5 + 0.5 × (1 - Growth))).
  • Decay ranges from 0.125% (G=1) to 0.25% (G=0).
• Low-Rate Phase (2% ≤ Inflation ≤ 5%):
  • Inflation{t+1} = Inflation_t+ 0.5 × (2% + 3% × G - Inflation_t).
  • Targets 5% (high G) or 2% (low G), with 0.5 adjustment rate for smoothing.

This design promotes reflexivity: high Growth sustains emissions for incentives, low Growth enhances scarcity via decay and burns. Adaptive burns can increase to 50% when no growth, further countering emission rates.

Simulation Projections and Comparative Analysis

Simulations (quarterly, base decay 0.25%) illustrate trajectories:

Table using the formulas to make a set of simulations on the numbers: MVX_Emission_Simulator_INTERACTIVE

*All inflation numbers are maximum theoretical values, actual inflation (how many new tokens enter the chain) is less as the accelerator fund part can be released only if well defined KPIs are met and the burn mechanism of the transaction fees starts.

B. Emissions Distribution Model

The EGLD generated from annual emissions will be programmatically allocated across four key areas to create a balanced and productive economic loop:

APR Calculations of the new model and comparison with the old model: APR Calculation

APR figures are indicative only and may vary based on network participation, governance votes, and market conditions. They do not represent a guaranteed or fixed return.

This distribution model ensures that new issuance is actively channeled to secure the network, incentivize productive network usage, and fund future growth.

Evaluation, rebalancing, governance

Every year, the distribution model is re-evaluated, as well as KPIs and targets will undergo a governance vote to adjust distribution for the next year based on the newest available data. Through this process, allocation buckets can be changed or removed, new allocation buckets can be added, and allocation percentages can be changed based on agreed-upon targets. A full governance vote will take place each year, with an annual report for the existing system publicly shared, recorded onchain, audited, and verified.

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III. The Value Accrual Flywheel: Revenue Reinvestment and Fee Burning

The new economic model introduces a sophisticated, dual-pronged approach to value accrual that combines a deflationary fee-burning mechanism with a revenue reinvestment strategy.

A. Updated Fee Market and Burn Mechanism

MultiversX will implement a fee market structure inspired by proven models like that of Ethereum’s EIP-1559, which divides transaction fees into two components: a base fee and a priority fee.7

• The base fee is a protocol-set minimum fee. It is split as follows:

• 90% to Builders: This portion is directed to the smart contract authors, creating a direct revenue stream for developers. This establishes one of the most competitive builder incentives in the industry.

  • When one transaction calls multiple smart contracts, the VM calculates the gasUsed exactly by each of the contracts, and the fees are directed towards each of them according to the gasUsed.

• 10% is Burned: This portion is permanently removed from circulation, introducing consistent deflationary pressure that is directly proportional to network activity.

• Every year, the base fee structure changes, builders get 5% less, 5% more is burned. This is done for 8 consecutive years, resulting in a split of 50% to builders, 50% to burn.

• The split of the fees will be additionally re-evaluated every year via a governance vote. Audits and reports will be created for each item to determine whether KPIs were reached or not.

• The base fee from transactions which do not call smart contracts (asset transfers, data transfers, recording data) will be burnt completely.

• The fees for the failed transactions are completely burnt, both base fee and priority fee.

• Priority Fee: An optional fee paid by users to incentivize faster transaction inclusion. This entire fee is paid directly to the validators (10% to the leader, rest to the consensus members), rewarding them for their role in processing transactions and creating a competitive market for blockspace that directly reflects the real-time economic demand for the network’s processing power. This clearly targets more revenue for validators and more opportunities for validators to build more. With growing revenue, the validators can choose to lower the fees on the staking provider side, creating benefits for the users, to share the fees with users, or to deploy those into DeFi.

  • The shard split algorithm takes into consideration multiple parameters. Available block space, used block space, pending validators in the auction list. This indirectly means that creating new shards happen only when that makes sense economically for all the actors in the network and when there is demand for bigger blockspace. Because of sharding priority fees are never too high, users enjoy the dApps at the lowest cost.

The scope of this structure thus creates a powerful dual-engine for value: builders are incentivized to create utility that drives transaction volume, and every single one of those transactions permanently increases the scarcity and baseline demand for EGLD. The 90% share of the fees to builders opens up a new set of applications and user experience, encouraging builders covering transactions free (through relayers) for their users. This share is meant to enable the creation of high frequency apps, activities, and bots, as the chain’s architecture provides sufficient block space. When blocks are full, validators can capture additional rewards from the priority fees.

*The capacity of the blockchain after the SuperNova upgrade is 1Billion Gas per seconds. Filling up one shard with smart contract transactions in one day costs 864 eGLD, which would yield 86.4eGLD in burns per shard, thus the cost is high enough for deter attacks. In year 8, it would be 432 eGLD burnt per day per shard.

B. Protocol Revenue Reinvestment Strategy

All revenue generated by the protocol is used to programmatically acquire and stake more EGLD. This creates a sovereign economic engine that perpetually strengthens the network’s security and capital base.

This mechanism functions as a self-reinforcing loop:

1. Revenue Capture: The protocol treasury captures revenue from various sources (e.g., fees from protocol-owned applications, a portion of ESDT issuance fees).
2. Acquire and Stake: Non-EGLD captured revenue (e.g., in USDC) is used to buy EGLD on the open market. This EGLD is then staked. Buyback is done programmatically via Smart Contracts, different fees are accumulated, and the only way to use those is via buying back eGLD from the open market.
3. Liquid Staking: To maximize capital efficiency, the staked EGLD is converted into a Liquid Staking Derivative (LSD) token. This LSD represents staked EGLD, accrues staking rewards, and can be used in low-risk yield strategies to increase returns. It effectively transforms the protocol’s own treasury into its largest and most active DeFi participant, creating a perpetual, sovereign demand engine that constantly works to strengthen the EGLD market

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IV. Catalysts for Growth: The Accelerator

The emissions distribution model establishes two powerful, community-governed funds to accelerate ecosystem growth and the protocol development fund. The funds go into open sourced, labeled DAO smart contracts and the tokens are released based on the well defined KPIs and exact formulas programmatically and only when the DAO members sign that the KPIs are met.

Decisions concerning the allocation of strategic emissions are inherently objective and tied to measurable network growth. The structure of the DAO, including the DAO member election and process definition, will be voted via full governance by all EGLD stakeholders. To ensure impact-driven allocation, the tokens designated for the Accelerator funds (Ecosystem Growth and Growth Dividend) are programmatically locked if there is no measurable growth. Emissions are released only when builders/DeFi strategies demonstrate impact by achieving predefined, onchain verifiable Key Performance Indicators (KPIs) related to metrics like active users, transaction volume, and TVL.

A. Ecosystem Growth Fund for Builders (20% of Emissions)

This fund is dedicated to nurturing the developer ecosystem. A DAO, governed by EGLD stakeholders and operating under the oversight of MultiversX Foundation, will oversee the distribution of these funds through a structured grants program. Funding decisions will be tied to clear, measurable Key Performance Indicators (KPIs) to ensure accountability and impact-driven allocation. The underlying philosophy is simple: protocol emissions must be used to fund the creation of applications that, in turn, create sustainable, long-term demand for EGLD.

Example KPIs for grant recipients could include:

• User Adoption: Monthly active users, new wallet creation.
• Onchain Activity: Transaction volume, smart contract interactions.
• Economic Impact: Total Value Locked (TVL), protocol revenue generated.
• Community Growth: Social media engagement, developer onboarding.

The underlying goal is to fund applications that create sustained demand for EGLD. To ensure emissions are utilized productively, several guardrails are added. Milestone based grants and Lock mechanism.

Milestone based grants as used in growth games is a proven method where builders and the protocol are aligned and strict timelines and KPIs are proposed, signed and verified at each milestone. If a milestone is not reached, the further grants for the project are locked, until those are met, or restructured to other builders.

Lock Mechanism for unused tokens is triggered by failure to meet predefined KPIs, thereby tying allocations to verifiable network growth. Oversight by the MultiversX Foundation and EGLD stakeholders via DAO ensures transparency and accountability:

• Trigger Conditions: If no qualified grant applications are received in a quarter, or if recipients fail to achieve at least 80% of targeted KPIs (e.g., <10% QoQ growth in TVL or transaction volume), the unused tokens are locked for future usage.
• Lock Calculation: Unused tokens = Allocated emissions - Distributed grants. Lock 100% of unused tokens at quarter-end, prorated if partial KPIs are met (e.g., 50% lock for 50% KPI achievement).
• Process: DAO reviews applications and performance reports; locks executed via smart contract. If demand exceeds supply, locked tokens roll over to the next quarter.

This ensures emissions are released only when builders demonstrate impact, preventing wasteful allocation and promoting high-quality projects.

B. Growth Dividend Fund for Users (20% of Emissions)

The Growth Dividend represents a new mechanism to reward network users for their participation in the network economy. For this, the MultiversX economic model distinguishes between two fundamental activities: Simple Staking and Active Yield Strategies.

• Simple Staking is the foundational layer of network security. It is a passive activity where users delegate their EGLD to validators, contributing to the consensus mechanism and earning a baseline reward for their participation. This is essential for the network’s stability and integrity.
• Active Yield Strategies, in contrast, represent a dynamic and high-yield paradigm for onchain participation. This framework is designed to transform the capital securing the network into a powerful engine for economic growth - a departure from legacy models where staked capital remains economically inert. It achieves this by channeling a portion of the emissions (20%) to incentivize users who deploy their staked assets in DeFi strategies. These strategies are explicitly designed to increase EGLD’s utility, onchain velocity, and direct market demand. Users deploying their capital to participate in such productive activities will be rewarded directly via a Growth Dividend. Any user will be able to participate in the active yield strategies, via one-click solutions, from low to high risk DeFi activities, open source, permissionless, trustless.

Like the Ecosystem Growth Fund, this Growth Dividend Fund is managed and overseen by a DAO governed by EGLD stakeholders. To participate, no specialized knowledge is required on the user end. By simplifying access to yield, the Growth Dividend Fund aims to convert the network’s entire staked supply into a potential source of active liquidity, creating an immense and readily deployable capital base that programmatically drives demand for EGLD within DeFi.

The underlying goal is to fund applications that create sustained demand for EGLD. To ensure emissions are utilized productively, several guardrails are added. The bucket incentivizes deploying staked EGLD into DeFi to boost utility, velocity, and demand, accessible via one-click, permissionless solutions, which drives back direct revenue to EGLD. One-click solution to migrate from staked eGLD to active strategies will be developed as well.

Safeguarding the Ecosystem: Open source, audits, security

To ensure that the rewards program supports only high-quality, secure protocols, a clear set of criteria must be met for any LST, DEX, Lending or other DeFi protocols to qualify for the boost. This directly addresses the need to ensure LSTs are in good hands.

Basic Criteria for Participating Protocols:

• Fully Open-Source: All code must be publicly available for review.
• Professionally Audited: Must have undergone and passed rigorous security audits from reputable firms.
• Secure Upgradability: All contract upgrades and privileged owner calls must be controlled by a Multi-Signature (MultiSig) wallet, preventing unilateral control by a single entity.

Clear alignment of economics: auto flywheel mechanics of preserving revenue in a decentralized and transparent way, funds to stay on chain, to have a treasury contract, extractive mechanics can be penalized by the DAO and suspend distribution

These criteria establish a high standard of security and decentralization, protecting users and the network.

The Core Principle: Boosting New Liquidity, Not Staking

Staked EGLD or LSTs act as a prerequisite—a key to unlock rewards on a separate, vital contribution. The boost is a reward calculated on the new, external capital (like USDC or wBTC) that a user brings into the DeFi ecosystem or how he uses other capitals in DeFi and how many DeFi activities he does.

• Analogy: Think of your staked EGLD/LST as your membership card to an exclusive club. The card itself has its standard benefits (base staking rewards). The “boosted rewards,” however, are earned only when you use that membership to bring a valuable guest (your USDC/wBTC liquidity) to the party.

Example: If you have 1,000 EGLD staked and separately supply $10,000 USDC to an approved lending pool, you will receive boosted rewards calculated on the amount of EGLD equivalent to that $10,000. The boost is for the USDC, which is a critical component for a thriving DeFi ecosystem. The one-click strategies can be made in such a way that one person brings the staked eGLD, the other person brings the external capital and the boost if split between the two, as an example.

Lock Mechanism for unused tokens is triggered by failure to meet predefined KPIs, thereby tying allocations to verifiable network growth. Oversight by the MultiversX Foundation and EGLD stakeholders via DAO ensures transparency and accountability::

• Trigger Conditions: Lock activate if DeFi strategies fail to maintain stables and BTC in active positions at least equal to the value of Liquid Staked eGLD (e.g., stables/BTC TVL ≥ Liquid Staked eGLD value), or if Liquid Staked eGLD does not grow QoQ (e.g., <5% increase).
• Lock Calculation: Unused tokens = Allocated emissions - Distributed dividends. Lock 50-100% based on shortfall severity (e.g., 50% for partial mismatch, 100% for no growth or severe imbalance), assessed at quarter-end.
• Process: DAO monitors on-chain metrics (e.g., TVL in stables/BTC pools vs. Liquid Staked eGLD); locks via automated smart contract. Eligible users claim dividends proportionally to their DeFi contributions.

This ties rewards to ecosystem liquidity, converting staked capital into active economic drivers while locking idle emissions to maintain scarcity.

Overview of exemplary Active Yield Strategies: A Catalogue of Active Yield Strategies

C. Protocol Sustainability (10% of Emissions)

This fund is dedicated to core operations and fundamental advancements of the MultiversX protocol. The primary goal of this bucket is to ensure protocol competitiveness by funding a world-class engineering team and a research and development department. This crucial investment aims to place the network at the frontier of innovation. The funds already go into the labeled multiSignature contract, this part remains as it was from the genesis, and it will receive transparency reports on how it is used. The technical development roadmap for the next releases after Supernova will be shared and followed and re-evaluated every quarter.

The Foundation systematically ensures proper management and accountability through concrete reporting mechanisms and community involvement. Specifically, it:

• Establishes guardrails in collaboration with stakeholders: category caps, SLOs/SLA targets, audit cadence, and lock/rollback conditions.
• Submits plans for community review: presents its quarterly/annual Sustainability plan to the community for feedback, assessing it against the approved guardrails and KPIs to ensure alignment.
• Monitors delivery with constant oversight: tracks execution (roadmap, audits, incident response, infra SLOs), publishes detailed dashboards and quarterly reports for transparency, and recommends locks/reallocations for stakeholder vote if thresholds aren’t met.

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[robert]

V. Reflexive Strategic Investment: High-Impact Capital Formation

Clarification Note: The preceding section shall be treated as a distinct, actionable component, excluded from any dual-option governance process. Only the present section will be subject to the activation protocol herein introduced.

The protocol also establishes a novel mechanism for strategic capital formation. This Reflexive, Price-Sensitive, Smart-Minting Mechanism enables the protocol to unlock significant capital, but only during periods of high market confidence and momentum.

This mechanism involves minting new EGLD in three distinct, milestone-based tranches. All newly-minted tokens are subject to a perpetual lock for the DAT and ETF, until they are returned to the foundation, and subject to a 3-year lock for the US Labs, ensuring long-term alignment and envisaging this strategic capital entering the ecosystem as productive, staked assets rather than liquid sell-pressure.

1. Activation Framework for the Strategic Investment Primitive

The strategic reflexive investment primitive is a novel mechanism designed to capitalize on market opportunities and accelerate strategic outcomes. Its implementation is governed by a structured framework grounded in core principles and rigorous safeguards.

Core Principles

• Context: All relevant information will be made available to stakeholders and ecosystem participants to ensure informed decision-making.
• Transparency: The entire process will be conducted with a high degree of transparency to maintain alignment among all involved parties.
• Protection: Robust measures will be implemented to safeguard the community and ecosystem assets before, during, and after the activation of this primitive.
• Intentionality: Based on the established principles, actions will be executed with a clear and unified purpose to seize time-sensitive opportunities.

Activation Protocol

The activation steps for the Reflexive Strategic Investment are as follows:

Activation Step 1: Double opt in governance, a dual mechanism for alignment and commitment

1. Preparatory Build-Up Phase: First, comprehensive context shall be presented to all key community members and stakeholders clearly outlining the objectives, mechanisms, and intended outcomes. Approval shall be sought through open and transparent governance to authorize: (a) the RSI framework, (b) its scope and strategic direction, and (c) a mandate to advance the preparatory efforts necessary for developing the prospective deal structures within the reflexive investment bucket. This stage shall henceforth be referred to as the Preparatory Build-Up Phase, and will focus exclusively on essential ‘preparatory’ matters such as identifying strategic deal partners, defining deal terms, establishing legal structures, and outlining the technical processes. Importantly, this phase shall exclude any token minting or activation, which will be addressed separately in a distinct decision phase.
2. Decision Phase: Second, following the approval of the initial governance proposal and the establishment of a tentative deal structure with soft commitments, a dedicated brief shall be issued for each specific instrument, such as the DAT, ETF, or US Labs LLC. The brief will provide contextual and technical information, detailing the proposed mechanics, objectives, and implications, and will serve as the foundation for a new, explicit governance decision by the community and key stakeholders. After this information has been transparently disclosed and approved through a second governance vote, the process advances to the Execution Phase.
3. Execution Phase: Third, once both the first governance vote and the second governance decision have passed, the full execution process will begin in accordance to the activation steps provided.

Activation Step 2: Transparency and use of funds

1. All funds created via this primitive are subject to a 3-year lockup and may be used only for their designated purpose, as stated in this proposal: (i) DAT funds, (ii) ETF funds, (iii) US Labs LLC funds.
2. Before any funds are seeded into the three entities, an overview of the mandate, objectives, and tentative timelines will be provided to the community, in accordance with the guidelines mentioned under Activation Step 1).
3. For each of the three designated use cases, a quarterly transparency report will be published, providing context on the use of funds in line with the mandate.

Activation Step 3: Security and protection

1. Subject to legal and public-markets compliance, a transparent overview of locked funds and their addresses will be publicly available and updated quarterly.
2. Funds will be held in segregated multi-signature wallets, following the highest standard of industry security practices to ensure robust protection and compliance.
3. Any material decision or policy change with respect to the funds shall be subject to a separate governance proposal if it is beyond the scope of the initial mandate. If a decision is within the initial mandate, it will be communicated with 1–2 weeks’ prior notice.

Activation Step 4: Swiftness and intentionality

1. Once an instrument’s agreements are reached and committed, a public notice will be shared with the community, confirming the milestone, and proceeding to the second community governance vote. Once this has successfully concluded, a notice shall be presented, on the scheduled movement of funds, and immediate objectives, and next steps for each particular track and mandate.
2. Once the first governance vote has successfully passed, all necessary preparatory work will be carried out in parallel to bring each track to an executable state (documentation, compliance, custody, routing). Upon successful conclusion of the second governance vote, the implementation of this governance proposal with the execution of the seed investments shall be executed and the program shall move at full speed.

With these concrete and proactive activation Activation Points in place, the system provides a grounded mechanism for lockstep progress and community alignment.

B. Strategic Rationale

The RSI is not a recurring budget but a high-leverage instrument for extraordinary opportunities. It provides a mechanism to secure a DAT deal and establish an ETF without impacting regular operations or the perpetual incentive model. In this way, RSI complements the base emissions system: one sustains continuous growth, the other provides the strike capacity to pursue transformative, high-impact initiatives which result in real, measurable buyback flywheels toward the EGLD economy.

This mechanism provides a disciplined yet instrumental tool to finance targeted, transformative, momentum-building initiatives that can significantly accelerate external demand, global adoption and market presence for the network.

*Funds for the strategic investments will only be made available after the entity receiving the allocation has been thoroughly vetted and a contract with all the necessary partners has been reviewed, approved, and signed. The minting event will happen only after the public signing of the legally binding contractual agreements.

**The locked EGLD entered into DAT and ETF are not eligible for governance voting. All the locked tokens are clearly labeled, managed in multisignature smart contracts, and cannot be moved. This is ensured programmatically.

*** Part of the locked EGLD can enter into staking, but will receive only locked EGLD. The locked EGLD is only eligible for the 50% of simple staking emission and cannot participate in the other emission rewards lowering the emission rate. If DAT and ETF obtain regulatory approval to use their locked tokens in staking, the locked tokens will receive locked rewards only. The investors from the funding round (point 2) will receive their locked token and they decide whether to use it in staking or not. As these locked tokens are from labeled multiSig contracts, all of the rewards can be easily tracked.

The Reflexive Strategic Investment (RSI) mechanism is designed to convert moments of strength into lasting advantages. By tying capital formation to clear market thresholds, the protocol ensures that new supply is only introduced when external demand and confidence are already high. This creates a reinforcing loop: capital is unlocked at times when the market is most receptive, and then deployed to initiatives that further strengthen adoption and demand.

Unlike traditional fundraising or uncontrolled token emissions, RSI follows a strict framework: milestone-based triggers, locked issuance, and targeted deployment into transformative projects. This creates alignment across stakeholders and guards against dilution fears. Every minted token is locked for three years, eliminating sell pressure while signaling a long-term commitment to ecosystem growth.

The three milestone tranches are deliberately focused on initiatives that can redefine market perception and expand EGLD’s reach into mainstream finance:

• Digital Asset Treasury (DAT): A large-scale, demand-side deal that creates sustainable buy-side pressure and a permanent treasury structure for EGLD.
  • Executed via negotiated block purchases, structured forwards, or special purpose vehicles (SPVs).
  • Integrated with institutional-grade custody, compliance, and liquidity frameworks.
  • Can include staking, lockups, or yield components, turning static exposure into productive capital.
• Institutional ETF Partnership: An opportunity to integrate EGLD into institutional capital flows, enhancing both liquidity and credibility at a global scale.
  • Pursued through strategic alliances with leading global asset managers and ETF issuers.
  • Involves the creation and listing of a physically-backed (spot) product on major, regulated stock exchanges.
  • Built upon a robust framework of regulated custodians, market makers, and auditors to meet stringent exchange and regulatory requirements.
  • Bridges the gap between decentralized finance and traditional capital markets, making EGLD accessible via standard brokerage and retirement accounts
• MvX Labs US LLC: A raise and capital injection from big US investors, market visibility, marketing, entering new markets. Enabling a list of integrations: the premier institutional custodian in the US, enable global leader in cross-chain bridging and liquidity flow, and the world’s foremost stablecoin issuer as a starting point.

By limiting issuance exclusively to these catalysts, RSI maximizes impact per unit of minted supply. It ensures that newly created EGLD serves as productive capital instead of idle overhead.

---

VI. Expected Outcomes And Scenarios

The redesigned MultiversX economic framework is engineered to meet the ambitious targets set for the protocol. By shifting from a scarcity-based model to one of growth-driven productivity, the compounding effects of the incentivized economic activity unlocks a sustainable engine capable of scaling inflows, revenues, and reflexive reinvestments.

Why These Targets Are Achievable

1. Capital Inflow

   • The combination of competitive staking yields (9–12% APR), the additional Growth Dividend for active participants, and DAO-driven incentives for liquidity provision creates a superior return profile compared to both passive exchange holding and competing Layer 1s.

   • This advantage is designed to convert idle capital into active staked EGLD, reducing liquid supply while strengthening security. With around 50% of supply already staked, incremental improvements to yield and ease of participation are sufficient to reach 65–70% staking ratios.

   • The programmatic incentives for user-friendly yield strategies make scaling to >50,000 monthly delegates and >30% productive staked capital a realistic outcome.

2. Revenue Growth

   • Redirecting 90% of base fees to builders creates one of the most competitive revenue engines in the industry, while the 10% burn ensures that economic activity translates into EGLD scarcity.

   • Protocol-owned revenue, reinvested via liquid staking, generates compounding effects: revenue funds more EGLD, which funds more security and liquidity, which in turn drives usage.

   • Under conservative growth assumptions, network revenues can expand from current levels to $5,000–7,000/day in a base case, with $100k/day achievable in a high-activity scenario. These levels of revenue are sufficient to sustain both core operations and reflexive investments, while incentivizing developers and entrepreneurs to deploy their apps and build businesses on a network that offers not just best-in-class technology but compelling growth opportunities.

3. Competitiveness and Reflexive Investments

   • The tail inflation model guarantees validator incentives, protecting frontier performance in speed, bandwidth, and reliability.

   • The Reflexive Strategic Investment mechanism ties new issuance to milestone price thresholds, ensuring that capital formation only occurs when external demand is strong. This transforms periods of market strength into long-term structural advantages (e.g., Digital Asset Treasury deals, ETF integration).

   • By design, these reflexive levers amplify adoption and create a feedback loop of rising price, increased capital formation, and expanded ecosystem growth.

Scenarios

• Bear Case: Even under conservative adoption, staking rises above 55%, network revenues grow 10–20x from current levels, and TVL doubles to ~$120m.

• Base Case: Capital inflows of $50–70m, >500k monthly active users, $250m TVL, and revenues of $5–7k/day establish a self-sustaining growth path.

• Bull Case: Exceeding $150m inflows, >1.5m active users, $1b TVL, and daily revenues of $100k/day—conditions sufficient to fund a durable buyback engine, strategic investments, and mainstream institutional entry.

The proposed model does not rely on speculative scarcity; it creates productive scarcity—staking, yield strategies, and burn mechanisms that make EGLD both more useful and more scarce as adoption grows. This is a shift from passive store-of-value dynamics to an active economic flywheel that compounds growth across capital inflows, revenue generation, and reflexive reinvestments.

By aligning incentives across users, builders, validators, and investors, MultiversX transforms its economic base into a perpetual motion machine for value accrual. Thanks to the structural advantages of the new design, these outcomes are as ambitious as they are achievable.

Below we present three scenarios with possible outcomes based on a few key assumptions and variables:

VII. Implementation schedule (tentative)

Phase 1: Governance (October 2025)

This phase is dedicated to community review, feedback, and formal approval of the new governance framework.

• October 3: First Draft of the governance proposal is presented.
• October 3 - 19: Open Forum Sessions & Debates for live revisions and integration of community feedback.
• October 20 - 31:
  • The Grand Assembly convenes all stakeholders and community members.
  • The Final Governance Proposal is published.
  • The official Governance Vote takes place.

Phase 2: Technical Development & Initial Rollout (Q4 2025)

In case the governance vote passes, the focus will shift to technical specification and the deployment of foundational updates, otherwise phase 2 is not started.

• October 30: Publication of the Technical Implementation Paper for Staking V5 + Accelerator.
• Mid-November (Tentative): Launch of Staking V5.
  • This update introduces a new emission model, updated distribution mechanics, and MultiSig smart contracts for DAOs (ecosystem growth, growth dividend, protocol sustainability).
  • Practical token distribution rate is 4.3782%, as the accelerator will accumulate locked tokens until Supernova is activated and until the first KPIs are reached by the Ecosystem Growth and Growth Dividend funds.
• November 15: Publication of the Technical Implementation Paper for the Updated Fee Model, Coded KPIs, and Reflexive Strategic Locked Tokens.
• DAO member election and DAO process definition in November.

A New Genesis: SUPERNOVA, tentative December 2025.

Phase 3: Core Protocol Upgrades & Future Roadmap (Q1 2026)

The final phase will see the implementation of the new economic models and the unveiling of the project’s long-term vision. This phase will happen only after Supernova and only if the governance vote has passed.

• January 15, 2026: Implementation of the new Fee Model and coded KPIs for the emission model. This also includes the framework for reflexive strategic locked tokens (note: the token emission itself will require separate signing, for all the 3 RSIs separately as stated in section V).
• January 15, 2026 (Tentative): Release of the New Project Roadmap.

VIII. Conclusion

This new economic framework marks a strategic maturation of the MultiversX protocol. By implementing a tail inflation model with a burn mechanism, it guarantees the network’s long-term security and provides a sustainable budget for demand-driven economics focused on growth. The introduction of a priority fee market with a burn component creates a direct link between network usage and deflationary pressure.

The innovative revenue reinvestment strategy transforms protocol earnings into an engine for value accrual that grows in tandem with the ecosystem’s success. Complemented by DAO-governed funds for ecosystem development and a disciplined mechanism for strategic capital formation, this framework establishes a robust, self-reinforcing economic flywheel. It is an economy designed to perpetually grow, adapt, and compound value for all its participants, where every measure of success—from a single transaction to a billion-dollar TVL—is ultimately and inevitably reflected in the intrinsic demand and value of EGLD.

VIII. Appendix: Illustrative Economic Scenarios

To clarify the practical impact of the proposed economic changes, this section provides a comparative analysis of the legacy model versus the new model under different scenarios.

A. Scenario Analysis

The current economic model distributes approximately 1.2 million EGLD annually for staking rewards (based on a 5.13% rate on a 20 million EGLD base*), with 10% (102743.34 EGLD) allocated to protocol sustainability and the remaining 90% (924690.06 EGLD) to simple staking, yielding an approximate 6.5% APR for participants.

B. Comparative Distribution Table

At the current moment, ~1.8m EGLD (about 12.5% of the total EGLD staked) are participating in productive yield strategies via liquid staking to generate economic activity and value for the protocol. Through the Active Yield Growth Dividend, we are aiming to channel up to 50% of the total staked EGLD into such productive strategies, boosting TVL and driving transaction volume.

The boosted strategies provided by expert DAOs and chosen by the users can range from low-risk options with lower additional rewards to higher-risk and reward strategies with extra protocol incentives.

The Economic Flywheel: How LSTs and DeFi Drive EGLD Value

The Growth Dividend is designed to transform staking from a passive activity into a driver of network-wide economic expansion. At its core, liquid staking tokens (LSTs) compound two effects: they secure the network by locking EGLD while simultaneously keeping capital productive in DeFi.

By pairing staked EGLD (via LSTs) with external assets such as USDC or wBTC, users inject new liquidity into the ecosystem. This creates the foundation for deeper markets and more resilient DeFi infrastructure.

• More Liquidity → More DeFi: Builders can design advanced products and strategies when liquidity is abundant and reliable.

• More DeFi → More Opportunities: A richer landscape attracts arbitrage, trading, and innovative use cases.

• More Opportunities → More Transactions: Onchain activity accelerates as users, bots, and protocols engage with these markets.

• More Transactions → More Revenue & Scarcity: Every action generates fees for builders and the protocol while the burn mechanism ensures each transaction makes EGLD more scarce, creating a direct feedback loop where usage itself is the engine of value

In short, protocol emissions are no longer a passive subsidy but are instead precisely targeted capital injections, designed to bootstrap a perpetual cycle of liquidity, utility, and transaction growth—ensuring that the network’s emissions are constantly being met by an even greater, protocol-driven demand.

D. Influences from Leading Economists on Growth and Innovation in Crypto Networks

This paper draws conceptual inspiration from prominent economists who advocate prioritizing economic growth over strict inflation control, particularly by channeling resources (e.g., via stimulus or expansion) toward innovation and productivity. Here is a list of authors and books.

• Paul Krugman (Nobel Prize, 2008): Argues in End This Depression Now! for using emissions for productive recovery and growth, which parallels crypto networks funding development despite short-term price pressures.

• Mark Blyth: Critiques austerity in Austerity: The History of a Dangerous Idea, advocating instead for expansionary policies to invest in growth, a concept similar to avoiding artificial scarcity in crypto through productive token issuance.

• Edmund S. Phelps (Nobel Prize, 2006): Emphasizes in Mass Flourishing that grassroots innovation is the core of economic growth, justifying inflation when it fuels entrepreneurship, as seen in crypto grants and builder rewards.

• Tyler Cowen: Posits in Stubborn Attachments that maximizing long-term, compounding growth is a moral priority, a principle that applies to creating sustainable, innovation-focused economic models in crypto.

(!) Disclaimer: This document is not investment advice. It is intended solely to describe protocol-level mechanics under the applicable legal regulations.

[lucianmincu]

The cycle has flipped from “liquidity scarcity” to “institutional pull”.

The game is no longer about survival; it’s about scale.

Once markets go offensive, defensive approach becomes irrelevant.

It’s time to connect the ecosystem to capital markets.

The window is open - everything depends on us.

[dvz]

1. What is the new theoretical maximum supply if all reflexive minting milestones are triggered, and how will this be officially communicated to the community?

2. How will transparency be guaranteed regarding the use of the minted EGLD (contracts, reports, audits)?

3. How is the $100M or $50M valuation at milestones calculated: based on the EGLD spot price on the activation day, a time-weighted average, or a fixed reference price?

4. Who controls the minted EGLD locked for 3 years: the on-chain protocol, a legal entity (MvX Labs), or a community-governed multi-sig trust?

5. How will the risk of large sell pressure be avoided once the 3-year lock ends?

6. What happens if the $20, $35, or $50 thresholds are reached only temporarily (flash pumps) and the price quickly drops back down? What is the exact activation rule?

7. How will strategic partners (DAT, ETF) be selected, and what due diligence criteria are applied?

8. How will it be ensured that the buyback promised at the $35 milestone is executed as stated and not redirected for other purposes?

9. How does this new model align with the previous promise of a maximum supply of 31.4M? Will there be an official document replacing the original whitepaper?

10. What financial scenario does the team project for the next 5 years, including estimates of revenues, burn, net supply, and staking ratio, under bear/base/bull cases?

11. Are the $20, $35, and $50 milestones the only reflexive minting events allowed, or is there a possibility of additional milestones at higher prices? If so, what is the decision-making process and who validates it?

[arg215]

long-term holders are effectively being penalized for a strategic misstep.

From genesis, EGLD had years of emissions and runway to capture the very flywheel you’re now saying we need to build — revenue-generating dApps, sustainable financial activity, and reflexive demand. That was the whole promise. But the execution didn’t deliver.

Now we’re being asked to accept more inflation — framed as ‘targeted capital’ — to fund what should’ve already been built with the initial issuance. There’s no accountability here, and no clear mechanism to ensure this time will be different.

Before this proposal moves forward, we need answers on something far more important than inflation rates or emissions routing:

What strategic partnerships exist to support real dApp scale — especially in the U.S. and other major economies?

If the goal is to inject capital into builders, we need to know:

• Is there demand?

• Are there users?

• Have partnerships been secured to open markets that justify this capital flow?

Otherwise, we’re just creating another emissions loop — this time with EGLD, not MEX.

Please provide transparency on:

• Go-to-market strategy for U.S. and EU builders

• Status of stablecoin partnerships

• Ecosystem BD milestones to date

Without that context, it’s too risky to vote on a fundamental shift in EGLD’s monetary policy.

[metothex]

1. Infinite supply

9.47% inflation is huge and it’s impossible to be offset by burning only 10% of fees.

To offset 2.8M EGLD emmission we need the network to generate 28M EGLD in fees, which is almost 100% of the current supply.

This is so extremely unlikely, I will call it impossible!

So the Long-Term Trajectory: Demand-Driven Deflation is misleading at best.

2. Is this the economic model we want?

This proposal sets an economy based on rewards/revenue/funds minted out of thin air instead of being earned in the market by providing value. It’s basically an economy based on endless debt.

There’s no free lunch. Minting funds out of thin air always comes with a lot of hidden costs.

3. Assumptions, scenarios and plans

All the assumptions, scenarios and plans in the proposal are highly unlikely to be achieved in a decent amount of time (4 to 8 years).

If history is any indication, then the lack of credibility makes it even worse:

• current EGLD economic model (2020) has similar bear/bull adoption scenarios.. we’re nowhere near those after 5 years
• MEX & MEX2 tokenomics
• UTK2.0 & UTK3.0 tokenomics
• xWorlds, xFabric and the xPortal 3D avatar (with legs, right?) plans and assumptions.
• 99% of the announced parnerships in the last 5 years died before they were born
• misallocated capital: xWorlds, xFabric, 2024 conferences talking about SovChains when they were far from being ready.. just to name a few
• jumping from one narrative to another without delivering: everything is a meme, truth machine, S Korea.. now it’s US, DAT, ETFs. What’s next after the new model will be voted?

4. Good points

I like the Distribution Model annual vote idea and the DAO-Managed Ecosystem Funds, but I think all funds should come from network fees (and remaining inflation under the legacy model).

5. Final thoughts

It might be difficult to grow with the legacy monetary policy, maybe the inflation decrease rate was too aggresive, but I think keeping it is the correct path forward.

It’s natural to be difficult when there are not enough participants in the economy and when there’s not enough economic activity, but I think the capped supply model is much more rewarding long term and makes more sense.

More token supply doesn’t bring more value. More users bring more value. We’ve seen this with MEX and UTK different approaches of supply increase.

Also I think we should avoid chasing trends with tokenomics. Shiba was trending in late 2021 and now we’re stuck with millions of millions of MEX, so many digits that don’t even fit on screen.. and a million MEX is worth less than a coffee now.

[mvxbaseuser]

I believe the proposed shift from a hard-capped supply to a tail-inflation model is a step in the right direction. For a Layer 1 like MultiversX, maintaining a hard cap is fundamentally unsustainable in the long run. If network activity and transaction fee revenue decrease, the security budget could become insufficient, putting the network at risk. In this sense, introducing controlled inflation ensures the protocol’s ability to sustain validator rewards and network security over time.

That said, there are significant challenges in the current proposal that, in my view, require further refinement. An annual inflation rate of around 10%, combined with the potential issuance of up to 30% of the total supply (locked for 3 years) to raise approximately $100M for strategic treasury purposes, represents a substantial dilution. The only real counterweight to this inflationary pressure is a 10% burn of transaction fees which, in practice, may be too low to offset the increased issuance.

One major issue lies in the evolution of transaction fees themselves. Across the industry, transaction costs are trending toward being minimized to encourage user activity and adoption. In such a context, relying on a 10% fee burn is insufficient, especially when 90% of fees are directed to builders. This distribution could also create unintended economic incentives: builders might deliberately design less efficient smart contracts to maximize fee collection, even though the total fee pool will remain limited due to low base fees.

In my view, the fee structure should be rebalanced to focus primarily on burning EGLD, thereby counteracting inflation and creating sustainable value accrual. Specifically:

• The base fee should be almost entirely burned, reinforcing a strong deflationary mechanism directly tied to network activity.

• The priority fee (tips) should be split 50/50 between validators and burning. Validators are already well-incentivized through staking rewards funded by inflation, so tips can act as a complementary incentive for transaction prioritization, without absorbing the bulk of fee revenue.

• As for builders, allocating 90% of fees to them may not be an effective incentive if transaction fees remain low. Developer incentives should come primarily from targeted DAO grants and ecosystem funds, or from their own business models built on top of the protocol, as is the case on Ethereum. Reducing their fee share would allow the burn mechanism to play a more meaningful role in balancing the inflationary dynamics.

I would also add that maintaining a 10% inflation rate in the long term could be unsustainable, especially during multi-year bear markets with low demand and low on-chain activity. A 10% annual inflation equals a 100% increase in supply over 10 years. It would make sense to gradually transition from the initial 10% inflation (designed to reignite network activity) down to a sustainable 4–6% range over time.

Furthermore, more clarity is needed regarding DAO governance and how community funds will be managed. This is a central element of the new strategy. The community should have a clear understanding of the governance process, key decision-making criteria, and how funds will be allocated to ensure alignment between builders, users, and the foundation.

Finally, I believe a detailed roadmap outlining the next steps after the potential approval of the new economics is essential. Updating the economic model alone won’t be enough. We need a clear strategy on how, as a community, foundation, developers, builders, and ecosystem participants, we plan to attract new users, new liquidity, new use cases, and real adoption. Economic changes must be followed by tangible actions, such as the introduction of a native stablecoin, significantly improved interoperability (e.g., Axelar, LayerZero), and targeted ecosystem growth initiatives.

In summary:

• Moving away from a hard cap is the right strategic decision.

• However, the combination of high inflation, large strategic token issuance, and limited fee burn could lead to long-term sell pressure.

• Increasing the burn share within the fee structure, lowering the builder fee allocation, and relying more on DAO incentives and tips would create a healthier economic balance.

• The goal should be to design a model where network activity drives a powerful, structural burn that offsets inflation, rather than dispersing value through low-impact fee splits.

• Governance clarity and a post-approval strategic roadmap are critical to ensuring this new model translates into real, sustainable growth.

[alex1]

I understand your frustration, but unfortunately, coin printing is the only way out of the existential mess MultiversX is in. The project needs a lot of capital to turn things around and to stay relevant. I am convinced this is the only way MultiversX can generate the required capital. The alternative is to let MultiversX fade away into irrelevance.

[alex1]

@robert

• Digital Asset Treasury (DAT): A large-scale, demand-side deal that creates sustainable buy-side pressure and a permanent treasury structure for EGLD.
• Institutional ETF Partnership: An opportunity to integrate EGLD into institutional capital flows, enhancing both liquidity and credibility at a global scale.
• MvX Labs US LLC: A raise and capital injection from big US investors, market visibility, marketing, entering new markets. Enabling a list of integrations: the premier institutional custodian in the US, enable global leader in cross-chain bridging and liquidity flow, and the world’s foremost stablecoin issuer as a starting point.

@beniamin @robert

Dear both,

Concerning the Reflexive Strategic Investment, could you be so kind as to put an example for each of the three initiatives? (For example: MvX pays EGLD to a market maker.)

Do I assume correctly that MvX will spend the minted coins at the appropriate moment, and whoever buys the coins will then inherit the three-year lock-period?

All in all, I think this is the way forward. The approach is thought out well. I see strong lessons learned from past attempts. MvX’s technological excellence creates potential and is the project’s superpower, which in turn will be leveraged by the raised capital.

Cheers,

Alex

[cosmin]

I will start from idea that it is possible that we need just the price to go up and not changing that deep the economics.

So making the first print for the DAT and in parallel to “lock” the current year’s economic inflation mechanism (inflation minus fees) to be the “tail inflation” as long as things are needed to get traction on capturing transactions fees on the network and when / if adoption kicks in , the initial economic design to be back in place.

This way it can still be applied the distribution of the inflation like in the proposal towards normal staking / pro staking DAO etc.

I don’t mind to have a 3% normal APR or 5-6% pro-APR but on a EGLD that will never go back under 100$

So the idea is to capped / keep steady the current year inflation until it’s necessary and directly proportional with the evolution of network fees captured until network fees will cover the emission and then the hard cap will kick in.

The only compromise will be to print new tokens necessary for the DAT and then maybe finding other methods or price targets that the new printing to be as low as possible or finding other ways through DeFi maybe.

This way scarcity will be maintained. The community will still be familiar with the original model and the first principles and ethos / ethics of EGLD.

[metothex]

I would like to push some ideas to change the current proposal (to at least see some light at the end of a veeery long tunnel)

The key to economic sustainabilty is to earn more than you spend (or at least equal) and every economic entity’s goal should be to get there.

In our case is to burn more than we mint.

How to get there?

It will probably be a long process, but here how I see it possible (considering the team’s proposal and the needs for growth stated by the team):

Changes to the current proposal:

1. Inflation rate and burns

• 2M EGLD annual emmision = 6.9% (of the current supply) or 5.3% (of the current supply + RSI mints)
• 50% base fee burn, 50% to builders

This translates to the network needing to generate 4M EGLD in fees to offset the inflation (compared to 28M EGLD needed under the current proposal)

2. KPIs and accountability

(Needs improvements / better ideas)

The key indicator should be the amount of burned fees.

We should have annual targets of burned EGLD (voted through governance or DAO):

Example:

Year 1: 10k EGLD

Year 2: 15k EGLD

Year 3: 23k EGLD

Year 4: 35k EGLD

Year 5: 53k EGLD

And we should also have some kind of penalties (for the next year) if targets not achieved:

Example:

Who should be accountable for bringing adoption and usage? Maybe builders, DAO funding the builders, simple-stakers for being pasive? In this case:

• 60% fees burn / 40% fees to builders
• Ecosystem Growth Bulders: 15% (burn the remaining 5%)
• Simple staking: 45% (burn the remaining 5%)

Hopefuly the main idea is easy to understand, kinda difficult to think deep enough through the details in a few days while the proposal took 2 years to be made, right?

[robert]

@robert

MvX Labs US LLC: A raise and capital injection from big US investors, market visibility, marketing, entering new markets. Enabling a list of integrations: the premier institutional custodian in the US, enable global leader in cross-chain bridging and liquidity flow, and the world’s foremost stablecoin issuer as a starting point.

Hello.

The minted coins are not spent.

1. DAT is digital asset treasury and it acts according to the laws, not run by foundation. First they need a capital, which is locked for 3 years, they borrow against it and buy more eGLD with the borrow.

2. ETF is another similar story. One pagers for this has to come out.

3. MvX US Labs LLC receives stables from VCs, VCs get locked tokens.

[gdad]

The Growth Dividend for Users brings more unnecessary complication. I get there is a wish to increase chain activity but this should not have any link to a new economic proposal. If defi apps themselves cannot attract usage then its down to them. Its already confusing enough for new participants to navigate blockchain ecosystems as it is without adding more curveballs. This saves you 20% of that portion of inflation. Keep staking simple

[erd1954]

I agree with shifting to a controlled inflation model for more sustainable growth in EGLD, but adding some built-in protections would help avoid too much dilution for holders. Im pulling two ideas from what worked in Ethereum and Polkadot, this could strike a good balance between rewarding activity, driving genuine adoption, and keeping value tied to solid supply and demand basics.

Idea 1: Phased Implementation with Early Institutional Partnerships for RSI
It could be good to roll this out gradually over 2-3 years, kicking off with just 3-4% inflation in year one and ramping up only as the burn systems show they’re working based on actual data. That way, it builds confidence and leaves room for tweaks, much like how Ethereum eased into Proof-of-Stake. At the same time, bringing in early partnerships with institutions or major funds for those Reflexive Strategic Investments (RSI) would help—matching new token emissions with fresh capital from outside. For instance, teaming up on mints with exchanges or VCs could cut down on dilution while pulling in real demand, similar to what Polygon did with their corporate ties to pump up inflows and steady the price.

Idea 2: Automatic Circuit Breaker with Aggressive Burn Mechanism Tied to Adoption Milestones
It could be good to add an automatic “circuit breaker” that dials back inflation if burns drop below 50% of emissions for three months straight, keeping the supply in check and safeguarding holders, like the staking tweaks in Polkadot. Pairing that with ramped-up burns triggered by adoption goals—like bumping fee burns from 10% to 20% once TVL hits $500M—would reward actual network expansion with more deflationary kick, cutting inflation risks and sparking demand. It’s a lot like Binance Coin’s burn approach, which has built lasting value by tying scarcity to real usage.

I tried to post this on the Pulse site, but for some reason it says I have 0% voting power, so here I am.

[jordan]

So the proposal is to pay everyone at the expense of longterm holders to use Multiversx from every angle? Pay the builder, pay the validator, and pay the user?

This could work, but it is a very risky longterm strategic play. Everyone’s incentive to use Multiversx would be to pay them. This is flawed. Why not just go the traditional route? Hire a sales team, get business development professionals on board, and focus on driving revenue through targeted efforts via builders? It is a more predictable and sustainable way to drive revenue. I do not understand why everything needs to be experimental.

Secondly, these kind of proposals should be coupled with a growth strategy. The growth strategy here is theoretical. If you pay people EGLD, they will use it. The caveat is whether people find value in EGLD, which we are subsequently reducing from the start with this economic model. Sure, Supernova might be big and positions us well, but the route problem still lingers. However, as we have found, banking on tech to drive value is only one piece of the puzzle. Banking on paying everyone on chain no matter who they are just feels desperate to be honest.

We need a tried and true way to drive growth. Multiversx has no more runway in my eyes for risky bets. Focusing on builders without a sales team and marketing team seems like a fools errand.

Sales focuses on getting builders and partners that will drive revenue. Marketing focuses on promoting the products built on the blockchain, which is a win win for the builder and the chain. The incentive for builders? Free marketing. This a simple method to drive revenue and adoption. Does it cost money? Yes. Is it a better investment than paying everyone? Also, yes, in my opinion.

Please consider a new approach.

[robert]

1. The minting of new tokens can happen only when those contracts are publicly signed. Not before. So the contracts has to be presented to the community with official numbers. Those are minimum thresholds at where the minting can happen, so from that minimum it can be calculated. Also, if those are minted, inflation drops, as those are locked tokens. If the price is higher than the catalyst, the mint will happen at that price, not at the crossing trigger.
2. DAT/ETF are heavily regulated, so it is super clear and only one those things can happen. For the funding round, yes, with contracts, quarterly reports and audits to be presented.
3. For DAT and ETF I think the law says spot price. For the VC round, it is negotiated with the VCs.
4. A legal entity for each of those things and VCs for the third part.
5. DATs and ETFs are bringing in constant buy pressure of eGLD, even after the 3 years period. The big VCs will want to see revenue, volumes, tvls and will not sell.
6. The activation rule is complex, price needs to be over the thresholds and contracts publicly signed.
7. Proven record will be one, but it will be presented to community beforehand.
8. We publicly sign a contract and put it on chain. So if not executed MvX US LLC is liable.
9. Yes, if it is voted in by governance, the whitepaper V2 will be written and released.
10. A few scenarios were made for a 1 year projection, it is in the document up there.
11. The mint happens only when price is higher than the threshold and the public contracts are signed.

[robert]

Long term holders receive the most of eGLD from the new economics.

If there are no real dApps, those tokens are burnt, not given out. That is why the KPIs and hard rules are set in stone.

For the questions, the simple answer is yes, yes and yes :).
Emission is not giving out without KPIs, it will be injected in really well defined cases which bring in buybacks, it there are no solutions for that, those emissions will be burnt.

Danny Serb spoke yesterday on the spaces, yes, we have aligned partners, a lot of them, even stablecoins, custodians, institutionals. Will try to frame the things, in such a way in which it is clear, that if those things do not happen, tokens are burnt.

[robert]

1. The tail inflation will be a curve. Not 9.47% continuously. I will come with the curve today. Burn can be changed, inflation is not the biggest problem, stagnation is. Growth resolves all of the issues.

2. It is not free lunch. Those emissions will happen only if economics is productive. Otherwise it will be burnt. Will try to amend this in a good way to be clear.

3. I get the list where we made mistakes. But there are a bunch of things which went well. SUI pushed a bunch of money into projects and 2-3 out of 100 made it work. Same with Solana and Ethereum consensys. It is not jumping narratives.

4. I would love to have the network to generate that amount of fees. But we cannot increase the fees, tax increase never created growth.

   This is not simple emission, we try to target only productive economic activities, if that does not happen, tokens are burnt.

[robert]

It would make sense to gradually transition from the initial 10% inflation (designed to reignite network activity) down to a sustainable 4–6% range over time. → TOTALLY AGREED. Inflation should be driven by demand. Need a couple more hours to create the math for this.

More BURN is not a bad idea, but isn’t it better to reuse money in circular economies? Money going around create more value. Why developers 90% → it can be though as AWS credits, where those rewards are used to create even more usage and demand on the chain with transactions.

DAO’s will have a constitution, defined KPIs, so they cannot be corrupted. Andu had a set of great ideas about this, which will be defined.

Roadmap → TOTALLY AGREED. That is the plan. If no liquidity is attracted, tokens are burnt, if not builders come, tokens are burnt. And the other funds can be tied via contracts.

[robert]

The MvX will not spend the minted coins. Those are locked for 3 years and given to DAT/ETC/VCs and are not given to foundation. DAT and ETF can be used for that only. The funds raised, 50% of it will be used for buybacks, 50% for US operations and partnerships and integrations.