Zhu Su expressed:  Coins which exist to serve existing holders as opposed to provide utility and value for users, both current and new, will be decimated in years to come.

Community Reaction:  Tell Avalanche to remove their burn then.

Emin Gun Sirer:  Fee burning is a fantastic security mechanism suitable for leaderless operation. We pioneered it for the EVM. Any other mechanism for assigning fees creates perverse incentives for value extraction. I suggest you think this suggestion over a bit more deeply.

He was making a point that Zhu Su is a hypocrite. He’s previously blamed 1559 for ETH incentive misalignment between holders & other stakeholders, yet apparently doesn’t see an issue for the same mechanic in AVAX.

My reading of that comment was that it wasn’t so much about the burning, but more about that devs spent time on it while it doesn’t really address the most important UX issues important to (new) users? (And instead, mostly benefits holders through the burn mechanic)

Better put: more of a criticism of priorities.  Coins that focus on short term gains and VCs while sacrificing decentralization will be decimated in years to come.

Decentralization is the heart and soul of crypto Any coin which takes its eye off the ball of decentralization is in danger Any coin isn’t decentralized is close to worthless And any coin which has a creeping tendency to towards centralization is ultimately doomed.

Seems more like he means ponzi-only mechanics will die off in favor of actual fundamental utility?

Disagree. a coin that gives 10% return a month, is a good coin – no matter if it provides other utility. coins can be many things – a bonding thing for an existing community – placeholder for other things – coordination mechanism – value accrual piece – utility builder – etc.

Nope – you’re describing the very definition of a Ponzi scheme. Such a +10%pm coin isn’t generating +10% added value for the Real World™ – it’s simply robbing Peter to pay Paul. And that’s unsustainable. So it’s ultimately doomed.

Check revenue growth rates of normal business and translate it to crypto.

From the top of my head: all the staking stuff where the selling point is the yield, gov tokens where there is no overlap between holders and users, algo ponzis. Interesting dichotomy for sure.

Your logic has me stuck.  How can a coin “serve” its holders if it’s not providing value or utility? They aren’t mutually exclusive concepts.  The fact I would say they are more correlated. You can’t serve without providing value or utility. What am I missing?

You’re missing that many coins are Ponzi schemes. They give apparently very high rewards to a subset of their own early holders, and advertise that loudly, as a feature. But they fund those rewards only from the later investments of new buyers. That’s not sustainable.