Grayscale warns token inflation may reduce holder returns

Grayscale reported that increasing token supply in certain cryptocurrencies could diminish the economic benefits for holders. The firm introduced a valuation framework that assesses both protocol revenue and the value returned to token holders. This framework calculates token holder yield by adding staking rewards and buybacks, subtracting the value of newly issued tokens, and dividing by circulating market capitalization. As of Oct. 20, HYPE had the highest token holder yield at 8.0%, while CRV had the lowest at -5.5%. On an adjusted yield basis, CAKE ranked first at 14.4%. Grayscale noted that new token issuance and unlocks might counteract the positive effects of buybacks and staking rewards, emphasizing that protocol revenue should be evaluated separately from the economic benefits for token holders.