Basic Value Flow
You will notice that the "value" (qualitative) of the asset is prioritized, not the "amount" (quantitative).
Last updated
You will notice that the "value" (qualitative) of the asset is prioritized, not the "amount" (quantitative).
Last updated
To begin with, we can categorize people into 3 financial statuses; upper class, middle class, and lower class, as you can see in the diagram below.
If we are talking about equality in their financial, you will notice that the lower class one (Mr.C) should gain more amount of assets in order to catch up with Mr.B, and hopefully Mr.A in term of wealth. Another case is for Mr.A and Mr.B to get rid of their asset to have as less as Mr.C, but who would do it in reality?
The desire to gain their financial status to meet or exceed others, we call this "desire state".
In traditional economics where inflation occurs, Mr.C must acquire more amount of the asset. In the case of a fair game where all of the newly minted assets are distributed proportionally to everyone, there would be no problems in fighting for the status.
However, the denominated currencies/ products/ services are affected. Consider the cost of a slice of pizza in USD. In the past, a slice of pizza cost less than 1 USD, but due to years of inflation, finding a slice for 1 USD is now rare in the US and many developed countries. Consequently, people need to acquire more money to maintain the same standard of living, meaning Mr.C will face that acquiring money to is getting more difficult.
The scenario implies that people in traditional economics are chasing dividends or gaining in amount to maintain their lives. Whenever no more dividends flowing into your pocket (or less than the inflation rate), you begin losing.
However, when the same scenario is applied to OWY's Inverse Economics, things get significantly changed. Thanks to Supply Contraction, which is the idea of promoting value in all hands by focusing on a single activity "saving". This means that the longer OWY you hold, the more value it increases and the more mature/liquid your OWY becomes. Furthermore, the desire state in OWY's Inverse Economics is all about chasing value or capital gains, instead of dividends or amounts.
In short, when you have any amount of OWY in your wallet, you are not actually holding the amount of tokens, but the shares of tokens computed from the total supply, which is reduced over time through spending taxation. It means that even if you do not acquire more OWY, your current amount will work for you by increasing its value.
Taking the same scenario, Mr.C now has the hope and possibility to catch up with Mr.B and Mr.A by just saving. This economics gives saving a great choice of investment again.
From the given scenario, it can be seen that the longer you hold, the larger of your pie or share will be (Mr.C %Share changes from 0.5% to 5%).
This economy creates a competition towards long-term management strategies among holders. There is an opportunity to spend, and there is also an opportunity to save. One's opportunity costs are one's benefits gained, and vice versa.
