Update
Grayscale Examines Token Inflation Impact on Earnings
Grayscale, a digital asset manager, has released a new analysis examining how growing token supplies can reduce the benefits for holders of earnings-generating crypto applications. The report, published on October 21, introduces a framework for evaluating income-generating protocols by comparing earnings and distributions with market capitalization, accounting for supply inflation. Head of research Zach Pandl outlines the framework, which distinguishes income produced by applications from the economic benefit attributable to holders through measures such as staking rewards, buybacks, and token burns. The update highlights the importance of distinguishing between repurchases and permanent destruction in assessing token supply changes.