Game Theory Analysis: fly.inc Token Ecosystem Strategic Actions Analysis 1. MINT Strategy Early Minters: Optimal Strategy: Mint early, secure permanent advantaged position in redistribution formula Expected Outcomes: 10% immediate loss offset by exponentially higher share of all future fees Equilibrium: Strong incentive to be among first participants Risk Profile: Initial 10% loss with unlimited upside potential if system gains adoption Mid-lifecycle Minters: Expected Return: Positive but significantly lower than early minters Decision Factors: Must evaluate if enough future volume will occur to overcome entry fee Nash Equilibrium: Becomes increasingly less rational to mint as time passes Late Minters: Expected Return: Likely negative after accounting for fees Strategic Position: Primarily speculative rather than system-mechanic driven Game Theoretical Outcome: Rational players should avoid late minting unless expecting short-term price surge 2. HOLD Strategy Early Holders: Optimal Duration: Indefinite holding maximizes returns Expected Benefits: Compound effects as each transaction enriches position Strategic Advantage: Fixed position in redistribution formula creates permanent advantage Nash Equilibrium: Strong disincentive to ever sell once established Mid-lifecycle Holders: Decision Matrix: Must weigh accumulated benefits against future expectations Strategic Considerations: Holding becomes rational if anticipating continued high volume Comparative Disadvantage: Permanently disadvantaged versus early holders System-wide Implications: Creates natural "diamond hands" effect without explicit locking Generates powerful network effect where holders become marketers Results in potential liquidity constraints as rational holders rarely sell 3. BURN Strategy Early Burners: Opportunity Cost: Permanently surrenders advantaged position Limited Downside: Maximum 20% loss when using platform correctly Paradoxical Effect: Action benefits remaining holders, especially early ones Mid/Late Burners: Expected Outcome: Almost certainly net negative after two 10% fees System Effect: Reinforces value for remaining holders Game Theory Insight: Creates "last one out loses most" dynamic Price Support Mechanism: The 20% maximum loss protection creates rational price floor Burning tokens reduces supply, potentially increasing per-token value System penalizes market exits while rewarding those who remain 4. NON-ENGAGEMENT Strategy Early Non-Engagement: Opportunity Cost: Missing exponentially advantaged position Rational Basis: Uncertainty about system adoption/longevity Strategic Positioning: Option to observe performance without capital risk Late Non-Engagement: Expected Value: Higher than late engagement Nash Equilibrium: Rational strategy for late-comers System Implication: Creates natural adoption ceiling over time Systemic Equilibrium Analysis Temporal Incentive Structure The system creates dramatically different incentives based on entry timing: Early phase: Strong rational incentive to mint and hold Middle phase: Diminishing incentive to enter, strong incentive to hold if already in Late phase: Rational to avoid entry, existing holders still incentivized to maintain position Self-Sustaining Mechanisms The flywheel is designed to be self-reinforcing through several mechanisms: Transaction Dependency: Every mint/burn/transfer enriches existing holders Exit Penalties: 10% burn fee creates significant friction against selling Position Preservation: Loss of advantaged redistribution position if exiting Value Creation: Burns reduce supply, potentially increasing token value Long-Term Stability Considerations The system's long-term equilibrium depends on: Continued Activity: Requires ongoing transactions to generate redistribution LST Value Floor: The LST++ model has intrinsic yield value regardless of tokenomics Maximum Loss Protection: The 20% loss limitation provides downside protection Adoption Curve: System benefit peaks at optimal adoption level, potentially declining after Conclusion: Nash Equilibrium The dominant strategy that emerges is: Mint as early as possible Hold indefinitely Encourage others to participate (to generate fees) Never burn unless absolutely necessary This creates a fascinating economic machine that strongly rewards early adoption and long-term commitment while naturally promoting viral growth through aligned incentives. The 20% maximum loss protection adds a unique safety mechanism that traditional tokenomics lack, potentially creating more sustainable participant behavior.
@STACCoverflow How the fuck you be typing these so quick. Using AI?
@STACCoverflow Why is LST++ called "Beta Model"? I thought the flow was Launchpad > LST++ > INF++ But this looks like a different distribution model
