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🪙 Supply Details

PropertyDetails
🪙 TokenLAVA
🔢 Token supply1,000,000,000 LAVA
💱 Conversion1 uLAVA = 1 LAVA x 10^-6

Economic actors and Key Terms 👤​

  • Network contributors include Validators, LAVA stakers, Data Providers and LAVA restakers
  • Blockchains create onchain incentive pools to pay the network for services such as RPC
  • Consumers e.g. dapps and wallets purchase onchain subscriptions to pay the network for services such as RPC
  • Data Providers and LAVA restakers offer services such as RPC
  • Validators and LAVA stakers secure the Lava blockchain
  • Incentive Pools are pools of tokens deposited on Lava, which usually contain the native token of a chain supported by Lava
  • Revenue on Lava = amount in incentive pools + LAVA amount of onchain subscriptions

LAVA prioritizes revenue, not inflation​

Most other blockchains are hyper-inflationary. They reward Validators and LAVA stakers by inflating token supply.

LAVA has no supply inflation. Instead of minting new LAVA to reward network contributors, contributors share the network revenue. Contributors include: Validators, LAVA stakers, Data Providers and LAVA restakers.

On Lava:

  • Validators and LAVA stakers do NOT earn rewards by minting new tokens.
  • Instead, blockchains and apps pay the network to provide services such as RPC.
  • Blockchains often pay in that chain’s native token.
  • Majority of these rewards go to Providers and LAVA restakers.

This is why staking rewards are “relatively” low on Lava. Majority of rewards go to the Providers and LAVA restakers who delegate to Providers.

Provider Drops & LAVA burn​

Many marketplaces, such as Lava, face an initial problem: demand does not come without high supply, but supply does not come without high demand. This is the “chicken and egg” or “cold start” problem. Lava has a novel solution for this.

44 million LAVA (6.6% of total supply) is distributed to attract Providers when there are fewer Data Consumers in the early stages of the protocol. This allocation is called Provider Drops.

Provider Drops are distributed across 4 years and vary on a monthly basis depending on how much paid demand there is for RPC via Lava. The higher the demand, the more Providers earn from the Provider Drop allocation. If there is less demand, the Provider Drop allocation is not as needed and therefore burned.

You can track Provider Drops, LAVA burn and revenue: burn.lavanet.xyz.