Faucets & Sinks

A faucet is an action that supplies tokens into the market, and a sink is an action that takes them away from the market; more specifically, ‘into’ and ‘from’ the floating supply.

The token buy and sell pressure are at balance inherently as the economy is cyclical in nature. Any endogenous supply surplus will come from iBTC and investors selling tokens, which is countered by a growing number of Attestors (which has a technical cap in the low twenties) and Delegators, as well as $BIT buybacks.

Keeping this increase in supply and demand at equilibrium is what requires careful planning and creation of tokenomics in line with expected user growth projections; this will be explained in the Tokenomics section further on.

Sinks

Indicated below are the sinks and their cause. There are four primary actors enacting buy pressure:

1. Attestors buying to stake.

2. Delegators buying to delegate.

3. iBTC buying back tokens with revenue generated.

4. Speculators buying.

Faucets

Indicated below are the faucets and their cause. There are three primary actors enacting sell pressure:

1. Investors & team selling tokens.

2. Attestors, Delegators, and other actors selling rewards.

3. Speculators selling.