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TRAC 2.0 Inflation Fears Causes a Stir

The TRAC Network is undergoing a massive shift as it prepares to roll out its new tokenomics model, TRAC 2.0, in 2025. The upgrade will see the BRC-20 token move from a fixed supply model to a dynamic one, designed to accommodate the network's long-term scalability and functionality.

While the proposed changes promise to place TRAC at the “core of the network's ecosystem,” they’ve sparked a mixed reaction among holders, with concerns about token supply inflation and the impact on existing holdings.

Why the Change?

Currently, TRAC operates with a fixed supply of 21 million tokens. With the upgrade, the supply will transition to a dynamic model, where it can expand or contract based on the network's demands.

In response to one post aggressively calling out the TRAC team for this move, the team clarified, "No new token. Here are the facts: TRAC 1.0 will be upgraded to TRAC 2.0... More use cases for the token, and it will be placed at the heart of the entire economy of the TRAC Network.”

This change aligns with the network’s goal of becoming foundational infrastructure for diverse decentralized applications. As TRAC explained, “If we had a fixed supply, then that would prevent us from scaling the network efficiently. Ethereum did a token transition (ETH 2.0) for similar reasons, and I think you could say that their token is doing ok.”

Community Backlash

Despite these reassurances, parts of the TRAC community remain skeptical.

Many have raised concerns over the potential dilution of TRAC’s value and the lack of clear communication. One holder questioned, “Will this 'upgrade' lead to a dilution of current TRAC? Considering you are complaining about a fixed amount (which YOU originally set by the way—let’s not forget that) it seems a weird thing to moan about.”

Similarly, another highlighted ongoing frustrations: “The main complaint and dissatisfaction of people is that you do not have a roadmap, and the information from articles on Medium often does not correspond to reality. Constant postponements of deadlines and making things up on the fly turn investors away.”

Despite these concerns, supporters argue that the dynamic supply model is essential for scalability. Long-time TRAC proponent Layer23 noted, “Tokens will be burnt as they are used as gas. Tokens will be issued to incentivize securing the network. The net impact on supply is still expected to be minimal, +-2% (minimal).”

Layer lays it out in a TL;DR format in the post below, and adds additional comments in reply to someone who had further questions:

Layer23 also added, "It's not that the primary objective is to change the supply, but the supply changing is an externality of the need for incentives/burning of the token for it to be used as the central token in the TRAC Network."

Pros and Cons of Dynamic Supply

That’s a lot to take in, so let’s look at the pros and cons of what’s transpired:

Pros:

• Scalability: TRAC 2.0 enables the network to handle growth without being constrained by a fixed token cap.

• Utility: The token will gain real use as a gas asset, embedding it within the network's operations.

• Balance Mechanisms: Burn-and-issue systems aim to regulate the supply, minimizing inflation concerns.

Cons:

• Dilution Fears: Some holders worry about potential devaluation due to increased token supply.

• Trust Issues: The lack of a clear roadmap has left some investors skeptical of the team’s ability to execute.

• Complexity: The move to dynamic supply requires clear communication to avoid misunderstandings.

While the TRAC team provides sound reasoning for transitioning to dynamic tokenomics, the controversy underscores a recurring issue: communication.

Perhaps the complexity of the subject makes it difficult to explain the changes clearly, leading to misunderstandings. Ultimately, there seems to be a gap in translating the team’s vision into something holders can easily understand and connect with.

Head of Marketing, Fitzy, dropped a short video covering these changes—so if you’re more of a audio/visual learner, this is well worth a look:

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Todays Markets

Ordinals

Fukuhedrons once again reclaim the top spot with a 21% floor price increase, taking them back to a 0.01 price tag—a 5x from mint.

The rest of the top 5 also remains relatively unchanged, with Bitcoin Puppets once again vastly outdoing their nearest rivals, NodeMonkes, on volume.

Pizza Pets nosedive 53.5% on the day, with some citing the transaction fees to finish the game to its conclusion—potentially reaching into the thousands of dollars—as a reason for the sell-off.

Volume is extremely low in the bottom half, with only 4 sales for Quantum Cats, and the total not even reaching a full Bitcoin traded. That’s more of a reflection on the market than the asset itself, of course.

The same can be said for the other quality collections featured in the top 10, with only 0.3 BTC traded for Bitcoin Frogs in 10th place.

When you look at the state of the volume as it is currently, this is most certainly not the time to be selling, if history has proven anything.

Runes

Calling for bottoms isn’t working, so you won’t hear your favorite newsletter doing that again. You have our word, for the good of our industry.

On a bloody red Tuesday, even $DOG suffers a dramatic drop down to 8.2 sats. With that in mind, Bitcoin breaking all-time high after all-time high is at least helping things on the USD valuation side of things, as the market cap for the Runes leader is $877m even with this pullback in sats value.

Elsewhere, it’s very much the same with PUPS, BDC, and GIZMO not changing much since yesterday’s later edition. CYPHER, however, drops from 10 sats to 8.9.

The analysis today is short and sharp: no major changes to what we’ve been seeing since the weekend. Sellers continue to find tokens to sell. If you’ve been sidelined and have been looking for entry, this may be a time to consider your options.

Farmer Joe posted another banger earlier today, and thus we’ll round off with the wise words of the PUPS founder once again. Hold on!

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