The Inflation Game - Why Emissions-Heavy Protocols Die Before They Grow

At first, it feels like magic. Yields are insane, TVL is mooning, and everyone’s talking about the “next big thing.” The Discord is buzzing, the charts are pumping, and even the meme account is bullish. But under the hood, it’s just a protocol lighting itself on fire to stay warm.

Emission-heavy token models don’t build ecosystems — they buy attention. By flooding users with rewards early, they attract mercenary capital, temporary hype, and a bunch of wallets farming and dumping on repeat. TVL goes up, sure. But so does sell pressure. What looks like growth is just a ticking countdown to collapse.

The problem? These incentives are unsustainable. When emissions slow down — or stop — the activity dries up. Users leave. TVL evaporates. And the token that once “incentivized growth” becomes a chart with no floor. All that’s left is a Telegram full of bagholders asking when emissions will restart.

Meanwhile, the early insiders already exited. The protocol points to “market conditions,” maybe tries a v2, maybe launches on another chain — but the damage is done. You can’t build community on exit liquidity. You can’t bootstrap value when your only product is inflation.

The truth is simple: if your product only works when you're paying people to use it, it doesn't work.

So next time you see a token promising triple-digit APYs, ask yourself one thing:

What happens when the music stops?

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