Publication Date: November 9, 2024
Zether is a project that dares to take a different path, opting for an infinite supply model. While many proof-of-work (PoW) coins limit their supply to create artificial scarcity, Zether’s infinite supply model aims to provide long-term sustainability and stability. This article explains why Zether’s approach to infinite supply ensures security and reliability for the blockchain community.
Most PoW coins are designed with a fixed supply, typically to generate scarcity and create hype. By capping the number of coins, these projects aim to drive demand and increase the price, drawing in investors. But does this approach support the blockchain’s long-term sustainability? Limited supply assumes that transaction fees alone will keep miners incentivized after rewards diminish. However, this assumption is flawed and could lead to astronomically high fees and decreased usage as users avoid spending coins.
When the mining rewards end, these blockchains rely solely on transaction fees to incentivize miners. If fees are too high, users stop transacting, making it unprofitable for miners, who may eventually abandon the network. This creates a significant security risk, as the absence of miners could make the network vulnerable to a 51% attack. Zether avoids this risk by rejecting the fixed supply model in favor of infinite issuance.
Dogecoin was one of the first PoW projects to adopt an infinite supply model, demonstrating that a steady flow of new coins can benefit miners and the network’s security in the long term. With continuous issuance, Dogecoin provides miners with a consistent incentive, supporting network stability without astronomical transaction fees. Zether has built upon this concept, incorporating an infinite supply model with a more refined emission structure.
Zether’s approach to infinite supply is intentional and designed for long-term sustainability. The Zether team understands the issues associated with capped supply, so they developed a unique emission model that provides most of the coin supply within the first year, followed by a steady, low emission rate thereafter. This ensures that the market remains liquid with ZTH coins while supporting miners.
In the first year, most coins will be distributed to establish a healthy liquidity pool and foster an active ecosystem. Following this initial high emission phase, Zether will maintain a fixed, low emission rate that enables continued mining incentives without saturating the market. This way, Zether ensures liquidity, mining feasibility, and network security without artificial scarcity.
The core of Zether’s vision is to build a blockchain that sustains itself without relying on artificial scarcity. By maintaining a low but ongoing emission, Zether supports miners, secures the network, and avoids the risk of a fee-driven ecosystem that would discourage user transactions. This approach contrasts sharply with capped supply models that, over time, become vulnerable as miner incentives diminish.
With Zether, miners have a long-term incentive to continue securing the blockchain, ensuring the network remains reliable and secure for all users. This approach provides a balanced way to sustain the ecosystem without compromising usability.