Jay, a China analyst, talked about altcoins, which have recently become a hot topic due to newly announced initiatives.
On January 14th, the DFINITY Foundation announced a very aggressive deflationary plan for Internet computers (ICP) in the new Token Economy White Paper “Mission 70”. According to the plan, ICPannual inflation is expected to be reduced by 70% by the end of 2026. Following this announcement, ICP The price soared more than 30% during the day, attracting significant market attention.
but, ICP is still trading 99% below its all-time high.
According to Chinese analyst Jay, this price change is not just a short-term market reaction, but a reassessment of Internet computing’s core value proposition. For DFINITY, this move represents a transition from a heavily subsidized infrastructure to an autonomous value engine, in line with its vision to “Reinvent the Internet.”
The published whitepaper written by founder Dominic Williams stands out not as an update to a classic project, but as a comprehensive fiscal tightening program offered to token holders. The goal is to reduce ICPReduced supply and increased demand are expected to push nominal inflation above 70% by 2026.
the current, ICPThe annual inflation rate is approximately 9.72%. A large part of this is due to governance voting rewards and node provider incentives. Mission 70 targets an absolute token reduction of approximately 44% on the supply side through changes to NNS incentive parameters. According to Jay, this approach aims to increase risk-adjusted returns over the long term through lower inflation and increased scarcity, at the expense of short-term profits.
The analysis shows that supply-side reductions alone will not be enough to reach the 70% target. Therefore, DFINITY focuses on the demand-side Caffeine AI platform. Caffeine enables natural language application development through large-scale on-chain language models. ICP network. creating a cycle ICP Burning provides a mechanism that can cause persistent deflationary pressure on a token as its actual usage on the network increases.
However, factors such as the relatively small size of the DeFi ecosystem, limited liquidity, and low number of users stand out as the main risks faced. ICP.
According to analysts, the success of Mission 70 depends on two key conditions. One is that reduced incentives do not drive node providers away from the ecosystem, and two is that Caffeine AI generates cycle burn at the expected scale. Otherwise, deflationary targets could put pressure on ecosystem vitality.
*This is not investment advice.
