BME on Akash: AEP-76 #400
Description
Burn-Mint-Equilibrium Overview:
The Burn Mint Equilibrium (BME) is a tokenomic model designed to balance supply and demand between a volatile value-accruing token (like AKT) and a stable utility token used for transactions. Inspired by models like those in Factom, Helium, and algorithmic stablecoins, BME creates ongoing demand for the volatile token by requiring it to be burned for minting the stable token, while allowing the reverse process (burning the stable token to mint the volatile one) to maintain equilibrium via arbitrage. This prevents supply bloat, captures usage value in the volatile token, and encourages holding/staking.
In the context of Akash Network, the goal is to preserve stable USD-equivalent payments (building on AEP-23's success in driving revenue growth) while revitalizing demand for AKT. Currently, AEP-23 allows tenants to use whitelisted stablecoins (e.g., USDC) for lease pricing and settlement, with a percentage of fees distributed to AKT stakers. However, this shifts demand away from AKT. A BME mechanism addresses this by introducing a native stable token backed algorithmically by AKT, making AKT essential for generating stable payment units.