By James Davis
According to Coingecko, Render’s Network token, RNDR, rose by 85% over the past seven days amid a new foundation launch and Render DAO’s approval of a new tokenomics model. Additionally, the token surged 290% last month and is currently trading at $1.68.
The project revealed its nonprofit organization on January 21, dubbed Render Network Foundation, devoted to maintaining the Render protocol alongside growing its ecosystem and community. Furthermore, this week, the Render DAO approved ‘burn and mint equilibrium,’ a new tokenomics model.
What Solution Does Render Offer?
Render provides artists with a distributed network of Graphics Processing units (GPUs) to help in rendering their 3d designs. The RNDR token facilitates payments for the rendering services offered. Despite accumulating massive gains this week, the token is still down 81% from its peak of $8.76 set in 2021.
What’s a Burn and Mint Equilibrium Model?
Going by a description on Github, the burn and mint equilibrium model means that the RNDR token will now serve as the proprietary payment currency; therefore, jobs to be done will be priced in US dollars. Then creators are required to burn an amount of RNDR equal to the job price.
Non-fungible and non-transferable Render Credits shall be issued in order to track jobs that have been completed. Further, Render Network will reward node operators for their availability to handle jobs via base-asset issuance incentives.
Render Network reported that it would set a net emissions cap to make sure that rewards will continue even when that cap has been achieved. Moreover, Render will adjust the emission amount based on the Network’s growth requirements.
That said, the Render system can only be in equilibrium if the amount of tokens burned is equivalent to the number of tokens minted. Therefore, when usage increases, supply decreases, thus creating an upward price movement, and vice versa if usage slows down.
Other Projects That Have Adopted Burn and Mint Equilibrium Model
Render Network joins several other projects that have applied the burn and mint equilibrium tokenomics model. Some of the notable names include the fallen Factom protocol and Helium Network.