The economic design of a subnet significantly influences its long-term viability and attractiveness to investors staking TAO. Subnet tokens, mirroring TAO’s structure, adhere to a Bitcoin-inspired model: a capped supply of 21 million, no pre-mine, a fair launch, and a predetermined halving schedule. Token burning—permanently removing tokens from circulation—reduces supply within this cap, signaling a subnet’s dedication to value preservation and eliminating concerns about future token dumps, thus enhancing investor trust.
For alpha tokens, the token price is determined by dividing the TAO_reserve by the Alpha_reserve. Tokens allocated to validators, miners, or owners (Alpha_out) remain outside the circulating Alpha_reserve until sold. Selling these tokens increases the Alpha_reserve while decreasing the TAO_reserve, driving the price down. Conversely, burning Alpha_out tokens prevents future supply increases, avoiding price dilution. While burns don’t directly raise prices, they are generally viewed positively, and increased TAO staking into the subnet can further elevate the Alpha price.
Historically, some subnets have used large, sporadic burns as a promotional tactic, creating short-lived price surges but often leading to volatility driven by speculation. Candles, subnet 31 on Bittensor, takes a different approach, emphasizing sustainable tokenomics to deliver lasting value for Alpha token holders. Currently, Candles funds a Rewards Wallet with miner emissions to support marketing and ensure reward payouts remain stable (between 90% and 110%). Notably, these Alpha tokens have never been sold.
To strengthen sustainability, Candles is redirecting these emissions to a dedicated Alpha Burn Treasury Wallet. This wallet stakes Alpha tokens, generating over 200 Alpha daily in emissions, which are burned weekly. This consistent, deflationary mechanism avoids reliance on one-off burns for market attention. As the subnet’s Root proportion (currently below 37%) decreases, staking emissions—and thus burns—will increase, amplifying the deflationary impact over time.
Why Weekly Burns?
Unlike infrequent, large-scale burns that spark temporary excitement, Candles’ weekly burn strategy prioritizes predictability and stability. This approach fosters a mature market, builds long-term investor confidence, and attracts Alpha token holders focused on enduring value rather than short-term gains.
Conclusion
Candles is redefining subnet tokenomics by prioritizing sustainability over fleeting market hype. Through a dedicated Treasury Wallet and weekly Alpha burns, Candles establish a predictable, deflationary model that supports long-term value growth for SN31 Alpha holders. As emissions-driven burns increase with subnet maturity, this strategy sets a forward-thinking standard for subnet economics, fostering stability and confidence.
Article source: CryptoMinedMind
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