Common misunderstandings about tokenomics
I keep seeing people seemingly not understanding these things:
The cost of an individual token is mostly irrelevant, what matters is diluted market cap not token price. XRP at $0.50 is not cheap compared to LTC at $180 USD. Actually LTC is significantly cheaper than XRP in terms of how much % of the total supply you are getting per $100. In terms of the total % of the network you are getting ADA is much more expensive at $1.10 than yearn finance at $32,700 USD.
Diluted market cap is usually a better measure of how expensive a token is than market cap. Diluted market cap is the value of a project if all of the coins that will exist are in circulation. Sometimes coins have less than 10% of the coins actually in circulation, so the diluted market cap is over 10x higher. e.g. Filecoin has a market cap of $2.3 billion, and a diluted market cap of $80 billion (similar to ADA and DOT combined). Exceptions for things like ETH where there is no diluted cap, and often coins with inflation aren't infinite as they are still limited by time.
Coins that give high APY usually have equivalent inflation levels, so in real terms you don't gain much*. When you stake on DOT / ATOM you're not getting 10%-20% a year. if in year 1 you have 10 coins out of a network that has 100 total coins between everyone. And you get 20% APY interest, then next year there are 120 coins total due to inflation. Then despite now having 12 coins, you still only have 10% of the total network in year 2. Staking usually just means the pie is being cut into smaller and smaller pieces each year in real terms (provided the market cap of the project stays the same).
(* it's possible you can gain more than inflation in cases where not everyone is staking. If only 55% of the network is staking, those that aren't staking are losing network share in real terms, and you can benefit from this if you remain staked.)
submitted by /u/Exirr