Solana/Economic System/Introduction

Student: "Teacher, you know what? I've decided to hold some SOL tokens long-term. I have a lot of confidence in its future! As the saying goes, sometimes going all in is a kind of wisdom."

Teacher: "Wow, looks like you already have an investor's eye! So when do you plan to buy more SOL to expand your position?"

Student: "Actually, I've already bought some. But you know, I'm also a bit worried about its future. Like with many projects in the crypto world, the team can just issue new tokens at will. Just like the bubble coin I launched recently, it suffered from severe inflation, and before long its value collapsed. I don't want SOL to end up worthless after holding it for a few years."

The Teacher adjusted his glasses and thought: Ever since you launched bubble coin, you've been minting new coins for yourself every day. The real miracle is that it hasn't hit zero yet.

Teacher: "Well, inflation is indeed one of the challenges many cryptocurrencies face. But Solana has its own mechanisms to address this. For example, Solana's inflation rate decreases year by year. Have you looked into its economic model?"

Student: "Oh? The inflation rate decreases each year? Does that mean SOL becomes more valuable over time? Sounds great!"

Teacher: "Not exactly. SOL will still be newly issued each year, but the issuance rate will gradually decrease. After about ten years, it will reach a stable level. So unlike Bitcoin, Solana doesn't have a hard supply cap, it's still an inflationary cryptocurrency."

Student: "So that means I can't just sit back and expect SOL to appreciate from deflation alone. Its value growth must depend more on whether it's widely adopted, right? If large-scale applications take off, then the value of SOL should rise with it?"

Teacher: "Exactly! The value of a blockchain ultimately comes from its use cases. Solana has already attracted a large number of developers and projects, and with the growth of DeFi, NFTs, and other innovative applications, Solana's network usage will continue to increase."

Student: "Hearing you say that makes me more confident in my decision to buy SOL! It really looks like Solana has a bright future!"

Teacher: "That's right, Solana has great potential. But remember, investing always requires a long-term perspective, don't get shaken by short-term volatility. Now, let's dive deeper into Solana's economic model and see how it aims to preserve long-term value."

Student: "Perfect, I'm really looking forward to this class! I'm ready to dig in!"