Skip to main content

How Do “Burn” Mechanisms or Staking Rewards Affect the Security Analysis?

Burn mechanisms, which reduce supply and potentially increase scarcity, and staking rewards, which offer passive returns, can both be interpreted as features that create an "expectation of profit" from the efforts of others. This strengthens the argument for a security classification, as investors are incentivized by financial return rather than utility.

How Does the SEC’s Classification Affect the Ability to Trade Derivatives on That Crypto Asset?
How Does the Lack of a Central Promoter Affect the Common Enterprise Analysis?
How Does Proof-of-Stake (PoS) Issuance Compare to the Burn Rate in Ethereum’s Economics?
How Do “Pre-Sale” Discounts Affect the Expectation of Profit?