Trader degentrading said PAPER’s new token minting design shifts the distribution balance away from early miners and toward newer users, changing the incentive structure from the project’s previous supply model. In his view, the adjustment is unfavorable for early participants, but better for the protocol’s long-term development and for organic users.
Earlier on Oct. 20, Papertrade said it has no current plan to make PAPER transferable and will revise both its fee structure and token minting mechanism. Under the updated issuance framework, every $1 million in losses would mint tokens equal to roughly 0.1% of the PAPER supply at that time, with the exact ratio depending on the mint rate when the contract upgrade takes place.
The team also said that when the pool is close to insolvency or has fallen into an insolvent state, it will stop using the previous fixed rule of minting 100 PAPER for every $1 of losses. That process will instead move to a time-weighted multiplier model. According to the team, the new setup will gradually dilute earlier holders over time and give more relative advantage to recent users.
On Oct. 20, trader degentrading said PAPER’s new token minting mechanism weakens the advantage previously held by early miners under the project’s earlier supply model, while giving newer users a relatively larger share.
He said the change is unfavorable to early participants, but beneficial for the protocol’s long-term development and for organic users.
Earlier in the day, Papertrade said it currently has no plan to enable transferability for the PAPER token and will adjust its fee structure and token minting mechanism.
New issuance formula replaces prior fixed model
On token issuance, the team said that for every $1 million in losses, it will mint tokens equal to about 0.1% of the PAPER supply at that time. The exact ratio will depend on the mint rate in place when the contract upgrade is carried out.
Papertrade also said that when the pool is nearing insolvency or has entered an insolvent state, it will no longer mint a fixed 100 PAPER for every $1 of losses. That rule will be replaced by a weighted multiplier mechanism that increases over time.
According to the team, the mechanism will gradually dilute the share of earlier holders over the long run and give more relative advantage to recent users.
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