Most tokens tend to decrease in value vs. ETH over time. They may launch with fancy tokeneconomics and complex staking mechanisms, but ultimately cannot escape the fundamental problems that arise from too much token supply, not enough demand, and insufficient liquidity to support the market.
As retards have become more savvy about the longevity of these incentive mechanisms, token cycles have accelerated. Over time, partially backed assets have gained popularity as an economic model to support token values over the long term.
In 2021, Olympus launched as the first project to utilize protocol-owned assets to collateralize its native token value and subsidize its market liquidity, pioneering ideas around RFV (risk-free value) and POL (prot col-owned liquidity). However, due to inefficiently designed constraints and high token inflation, these two ideas worked against each other, causing the market to ultimately collapse and the token to lose significant value.
More recently, a wave of new projects have emerged with an alternative token model: first with JayPeggers and then with White Lotus, these protocols offer a redemption mechanism for their tokens at par value to protocol-owned assets (RFV) coupled with a deflatinary supply mechanism via trading taxes to provide a guaranteed lowest possible price for their tokens (floor price) that can only go up over time. With this token model, these protocols can offer both sufficient liquidity for their market and long-term value to their token holders, sparking a new wave of innovation.
However, while an improvement in some aspects, these new protocols are still lacking in some shape or form. Aside from leaking value to arbitrage from external trading pools, they also fail to provision their token liquidity effectively, making their markets capital inefficient and inconducive with healthy price discovery. As a result, once these projects lose momentum, its hard for their tokens to regain upwards price trajectory and reignite speculative market activity.
As a retard myself, I’ve aped into all these different protocols and have been learning from their failures. I’ve taken all these lessons and have decided to launch a protocol that tries to fix these issues based on what I’ve learned. JIMBO is the result of these efforts.