Token reward inflation and failure

Many protocols try to solve growth with token rewards. They create a token, assign it a price target, and start distributing it to users.

In theory, this should create engagement. In practice, it creates extraction.

Once users realize the token can be farmed or claimed without real effort, the system turns into a race to exit. Tokens are dumped. Prices fall. Trust disappears. Growth stops.

This pattern happens because most reward systems are disconnected from real contribution. They reward actions that are easy to game, like volume spikes, airdrop farming, or temporary staking, but ignore things that actually grow the protocol, like content, community, integrations, or education.

---

Mistake	Result
Unlimited emission	Token value drops over time
No contribution tracking	Effort and impact go unmeasured
Focus on liquidity or volume	Short-term metrics rise, long-term interest drops
Fixed APY models	Rewards become predictable and easy to exploit
One-size-fits-all rewards	Valuable work gets the same payout as low-effort spam

---

Rewarding people with tokens only works if the system knows who actually deserves them. That requires more than a faucet. It requires infrastructure.

This is why Axynom was built.