The Ren Protocol, a decentralized exchange protocol for blockchain assets, has announced plans to mint 180 million tokens to fund a network upgrade. The tokens will be created through a process called "inflation minting," which involves generating new tokens and distributing them to existing token holders. The Ren Protocol will use the newly minted tokens to fund the development of new features and improvements to the network, including increased liquidity, improved user experience, and support for new asset classes.
According to Ren Protocol, the network upgrade is necessary to support the growing demand for decentralized finance (DeFi) services, which have exploded in popularity in recent years. The Ren Protocol aims to provide a secure and efficient platform for DeFi users to trade and manage their assets, and the network upgrade will help to ensure that the platform can scale to meet this demand.
The inflation minting process will take place over a period of four years, with the first tranche of tokens being distributed in the coming weeks. The distribution of tokens will be based on a weighted average of each user's holdings, with larger holders receiving a proportionately larger share of the newly minted tokens. Ren Protocol expects the inflation minting process to be completed by 2025, at which point the total supply of Ren Protocol tokens will have increased by 180 million.
The decision to mint new tokens has garnered some criticism, with some arguing that it dilutes the value of existing tokens. However, Ren Protocol maintains that the network upgrade is necessary to support the long-term growth and success of the platform, and that the inflation minting process is a fair and transparent way to fund the upgrade.