1/ Buy-and-burn is becoming the default ‘capital return’ strategy in crypto. I think this is a big mistake.
Profitable protocols shouldn’t shrink their balance sheets when they can do productive things instead.
2/ No early stage startup would take its profits and hand them out instead of:
- reinvesting in growth
- attracting partnerships
- extending runway
Yet markets reward protocols for doing exactly that.
Think about how insane this is.
3/ Buy-and-burns are payouts that limit growth
That might make sense for a mature business.
It makes much less sense for protocols that are still early, still competing, and still have huge room to expand.
4/ The reason NOT to do buy-and-burn is simple:
Cash…
