EGLD Supply Shock: MultiversX Breaks Promises, Sparks Controversy

Hold on to your hats, folks, because the MultiversX community is buzzing. A recent proposal to ditch the hard cap on EGLD supply has ignited a firestorm, raising serious questions about broken promises and the future of the token. Is this a strategic pivot or a stumble?

The Broken Promise: EGLD's Supply Cap

For years, MultiversX (formerly Elrond) has touted a fixed supply of around 31.4 million EGLD, drawing parallels to Bitcoin's scarcity model. Their website even boldly states, "There can only ever be 30 million EGLD." But now, a proposal spearheaded by core developer Robert Sasu suggests introducing a 9.47% annual tail inflation rate. Ouch. This feels like a rug pull for those who bought into the scarcity narrative.

Sasu himself, ironically, stated earlier this year, "Nobody is talking about increase in supply." Well, Robert, now everyone is talking about it.

The Justification: Growth and Liquidity

The MultiversX Foundation argues that this shift is necessary for growth, attracting liquidity, and fostering a more sustainable ecosystem. The idea is to burn 10% of validator fees and direct 90% of fees to builders to incentivize innovation. The hope is that increased adoption will drive revenue, creating a virtuous cycle.

The Skepticism: Inflation Nation

However, not everyone's buying it. Critics like Justin Bons from CyberCapital argue that the proposed inflation rate is excessively high and the burn rate too low. The worry is that this will dilute the value of existing holdings and create selling pressure from validators and smart contract owners looking to cash in.

xMoney's Shadow

This isn't the first time MultiversX has faced controversy. The xMoney project (also Foundation-owned) previously announced a token migration that effectively diluted holders. This history adds fuel to the fire, making the community even more wary.

My Two Satoshis

While I understand the need for projects to adapt and evolve, this move feels like a betrayal of trust. Transparency and clear communication are crucial in crypto, and breaking a core promise like this erodes confidence. I think MultiversX needs to do a better job of explaining the rationale behind this decision and addressing the legitimate concerns of its community. Otherwise, they risk alienating the very people who helped them get where they are today. Is this change really for the best, or just a way to kick the can down the road?

The Bottom Line

The EGLD supply cap debate is a reminder that nothing is set in stone in the crypto world. While MultiversX aims for growth, the path forward is fraught with challenges and skepticism. Whether this proposal will ultimately benefit or harm the project remains to be seen. One thing's for sure: it's gonna be a wild ride. Time to HODL on tight and see how this plays out! To the moon... or maybe just sideways for a while?