A Protocol Economic Model outlines the incentives, fees, and value distribution mechanisms that govern a decentralized application or blockchain protocol. This model dictates how participants are rewarded for their contributions and how costs are managed within the system. It establishes the financial sustainability and security framework of the protocol. A well-designed model aligns the interests of all network participants.
Context
The design of a robust Protocol Economic Model is critical for the long-term success and stability of any decentralized project. Debates often concern the balance between token inflation, fee structures, and the distribution of value to various stakeholders, including validators, liquidity providers, and users. Future research focuses on creating adaptive economic models that can respond to changing market conditions and user behavior while maintaining decentralization and security.
The Execution Ticket mechanism unbundles execution rights from consensus, transforming Maximal Extractable Value into a native, burnable asset to secure the network.
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