Controlling EGG supply
Last updated
Last updated
There's currently no hard cap on the supply of EGG token, making it an inflationary token.
Community members often point to this as a cause for concern, and while the chefs certainly understand the wish for a hard cap, there's a big reason we don't expect to set one in the near future:
EGG's primary function is to incentivize providing liquidity to the exchange. Without block rewards, there would be much less incentive to provide liquidity (LP fees etc. would remain).
So what are the other ways EGG's supply is limited, to counter inflation?
The chefs aim to make deflation higher than emission by building deflationary mechanisms into PenguinSwap's products. The goal is for more EGG to leave circulation than the amount of EGG that's produced.
By reducing the amount of EGG made per block, we slow inflation. This has already been done once: Since the first reduction in block emissions, we've already effectively reduced the number of EGG entering circulation from 10 EGG per block to 3.5. But we don't want to do this too frequently, too early, for the same reason we don't want a hard cap: we still need to incentivize people to provide liquidity.
Regular token burns (view burn address) are built into many of PenguinSwap's products (like a 10% burn of EGG spent on lottery tickets), with more on the way. Check the **** **** for details on present and upcoming deflationary mechanisms.