What should be done with the dual currency model, neglecting one aspect over the other? I came across this hot article by Teacher Ba Xiang, which is both controversial and inspiring. I also saw many interesting viewpoints in the comment section of this tweet. Coincidentally, I have been watching the performance of several dual currency economic models these days, so I would like to talk about them. The dual currency model works well, with the left foot stepping on the right foot and the green cloud ladder all the way, but if it's messed up, it's a death spiral. WLFI and USD1 are currently at a critical moment. Let's dive in! ⬇️ As usual, first summarize the core demands or viewpoints of Teacher Baxiang's tweet: The USD1 mining investment reward has a reverse effect on WLFI, which is prone to short-term wool party interference and accelerates the decline of WLFI. If we could be bolder and hold the WLFI reward USD1 in reverse, the effect may be better. Let's not discuss the position of holding for now, let's talk about the matter at hand. I have a few immature thoughts to discuss with the teachers: Why is there mining WLFI Yeah, why dig WLFI instead of USD1? It is obvious that USD1 is the core work of @ worldlibertyfi at present, which is to increase the adoption rate of USD1 at all costs and expand its ecosystem as quickly as possible. Looking at the data directly, this mechanism has already driven the growth of USD1 supply to $4.7 billion in the short term, and has directly contributed $500 million in growth through mining activities in the past two months. Without a doubt, Binance is the largest market in terms of adoption. Apart from mining WLFI, there have been several Binance Launchpool events where USD1 has directly participated. Looking back at the development of DeFi, similar mechanisms are very common in other DeFi projects, with the core goal of quickly establishing liquidity. Is the wool party negative Although the wool party may sell in the short term, this will help the WLFI token to be more widely distributed, promoting decentralized governance rather than centralized holding. I don't see anyone discussing this perspective in tweets or comments. Let's go straight to the data. The holders of WLFI have skyrocketed from 23.4k on January 1st this year to 96.2k today, accounting for 11.6% of the entire stablecoin market users and making WLFI the third largest stablecoin issuer. [Data: @ tokenterminal] The relationship between project initiation and farmers is actually ambiguous, and many successful projects adopt similar or even more radical methods in the early stages, including Uniswap and AAVE. In fact, WLFI has alleviated this issue through a governance staking system: users holding WLFI must pledge for at least 180 days to participate in voting and receive WLFI rewards of approximately 2% APR and USD1 deposit incentives, all of which encourage long-term holding and suppress rapid selling. Isn't it better to pull WLFI Okay, that's great. What does it mean? Is it not possible to promote the popularization of USD1 by pulling the WLFI market? Do you remember UST and Luna? Artificially creating sharp rises and falls in the market will only accelerate the collapse of the flywheel, while stablecoin USD1 is more suitable for capital arbitrage as a "preservation+return" tool. So, using stablecoins with sufficient collateral and low volatility as the driving force, and WLFI with relatively high volatility as the extension elasticity of ecological governance, is the prudent approach. You can view the USD1 real-time reserve proof mechanism through Chainlink. Transparency @ worldlibertyfi has done a good job in transparency, which further attracts institutional users and avoids the risk of short-term price manipulation, which is the right path. / Above are my recent thoughts. Coincidentally, HUMA has also encountered a similar problem recently, that is, mining HUMA with stablecoin returns, then smashing the market and causing a price drop. The price drop leads to more HUMA being mined out, and if this cycle continues, it will be troublesome. Fortunately, I have recently made some moves, but I feel that the model can still be polished and optimized. However, the essence of the project lies in the returns from stablecoins. Sometimes, sacrificing governance tokens for a short period of time is really necessary for the business. I feel that in this regard, the WLFI team @ ZachWitkoff and @ zakfolkman are quite experienced, focusing on the big and the small. Now we need to increase the adoption rate of USD1, which is still too small compared to other stablecoins. From this perspective, the current strategy should continue for a long time, and WFLI will have to wash away for a long time. Wish us good luck! / Author: Anymose | A Soft Core Science Popularization Writer This article is for educational purposes only and does not constitute any investment advice. Always remember DYOR!