Let’s talk about why you should buy $INIT from the perspective of a secondary market investor.
$INIT is the native token of initia, which has uses such as gas, governance, and liquidity staking.As an investor, we are very happy to see XX native token become a gas coin. After all, this is one of the very basic and practical cases.Many tokens only have the functions of staking and governance, which is indeed not so sexy for investors.
------------------------------------------------------------------------------------
What factors make $INIT rise? (Price Flywheel) 🚀
I think these factors will affect the price of $INIT in the early and mid-term.
Unlike most projects, INITIA's founder, Zon, has mentioned that the $INIT held by investors and the team is not only subject to a lock-up period but also cannot be staked.Non-stakable—Wow! Beautiful word, right? This means that two scenarios could occur in the early stages:
-
The on-chain APY is extremely high, attracting whales to purchase large amounts of $INIT to "capture" these profits, driving up the price of $INIT.
-
If whales are not interested in $INIT, the high APY will persist for a long time, benefiting long-term holders.(Sorry holder, I think the first one is more likely😭)
Simply put, after TGE, either the apy on the initia chain will be extremely high, or the price of $INIT will soar. I wonder if you still remember Evmos and Celestia. Especially Evmos, where the early APY was extremely high (200%+), attracting many whales to purchase EVMOS from the market to capture APY profits.However, similar to Celestia, the team and investors hold a large amount of tokens that can be staked, generating significant daily interest income. They often use this income to dump on the market, causing both the token price and APY to plummet. This is why "tokens held by investors and the team cannot be staked" is extremely important.
Additionally, another use case for $INIT is liquidity staking (similar to the pools in Osmosis). Regardless of which liquidity pool you participate in, you must pair it with $INIT. Imagine users participating in an XX/INIT liquidity pool and receiving additional ecosystem airdrops as rewards👀.
-----------------------------------------------------------------------------------------
How to retain users? Make a large amount of funds flow! (Ecosystem Flywheel) 🚀
I think these factors will affect the long-term price of $INIT.
I think the governance function of $INIT is also very interesting and practical, because the pledged $INIT not only protects network security, but also directly affects the core of initia - the "VIP" mechanism.
After the mainnet launch, 10% of the $INIT tokens will be allocated to the VIP reward pool. Each cycle will last two weeks, and the rewards for each cycle will be split into two reward pools: the Balance Pool and the Voting Pool.
-
Balance pool: Encourage initia's ecosystem to "grab" users' $INIT. The more $INIT is retained in a certain ecological project, the greater its share in this pool!
-
Voting pool: Voting is based on the $INIT that users stake in L1. Stakers can split their votes. For example, if you have 99 votes, you can choose to vote 30% for A, 30% for B, and 40% for C. The higher the score of the ecosystem, the higher the reward weight.
Of course, I believe these rewards will be distributed to users in the form of esINIT. (esINIT is non-transferable, and users must either maintain a VIP rating or convert esINIT for liquidity staking to unlock it.)
Therefore, after the mainnet launch, each transaction made by a user may potentially earn a reward. However, to unlock and earn more rewards, users will likely put more $INIT on-chain, participate in more activities, and align themselves with more ecosystems.The VIP mechanism will also drive ecosystem evolution. Think about it: if you don’t offer users additional rewards or provide content that is attractive enough to them, why would they be willing to leave their $INIT with you and vote for you?(So, it's likely that the rewards aren't just from staking $INIT, but also VIP rewards and additional incentives from the ecosystem side.)
So, let’s simplify it: thanks to the genius team’s design, $INIT’s utility is indeed very practical. Users buy some $INIT and then explore on the chain, and get esINIT rewards. In order to unlock and get more rewards, they will continue to participate in more ecological activities. In order to attract more users, more ecological projects will also add additional reward mechanisms. Multiple rewards attracted more new users, new users brought more funds to buy $INIT , and more development teams began to build interwoven rollups , which in turn brought more rewards.
Wow! Maybe even O'Neal's defensive fouls can't stop this flywheel from moving forward!?
If you are a secondary investor, and there is a token in front of you whose price and ecology are driven by a positive flywheel, will you miss it?