How Does the Reward System in Proof-of-Activity Affect the Overall Tokenomics of a Cryptocurrency?

The reward system in Proof-of-Activity has a significant impact on the tokenomics of a cryptocurrency. The distribution of rewards between miners and validators influences the inflation rate of the currency and the incentives for holding versus spending it.

A high reward rate can lead to higher inflation, while a low reward rate might not be enough to attract sufficient miners and validators to secure the network. The tokenomics of a PoA cryptocurrency must be carefully designed to balance the need for security with the desire for a stable and valuable currency.