Solving the Dilemma of Using and Holding Crypto Assets: Advantages of the Dual Token Model

In the blockchain and Crypto Assets space, a long-standing economic contradiction is that the actual use of the network may hinder its growth. This issue stems from the traditional single-token model, while the dual-token model may provide a solution for this.

The goal of most blockchain networks is to reliably record transactions, store economic value, and facilitate network development. However, the current mainstream single-token model has a paradox: users both want to hold tokens to support the project and benefit from its appreciation, while also needing to use tokens to pay transaction fees, which creates a contradiction between the two.

Using tokens to pay gas fees will reduce the user's share in the project, while not using the network goes against the original intention of holding tokens. This conflict not only affects the economic interests of users but may also diminish their voice in certain governance models.

The dual-token model provides a possible solution to this dilemma. In this model, one token is used for governance and value storage, while the other is specifically used to pay gas fees. This way, users can retain their "ownership" in the network without affecting daily use.

While the dual-token system is still rare at present, an increasing number of next-generation blockchain projects and decentralized applications are adopting this model. Some game finance projects, stablecoin protocols, and lending platforms have begun to implement the dual-token system, providing users with more flexible options.

A typical dual-token model usually includes the following features: the main token has a limited supply and is used for governance, voice, or dividends; the auxiliary token has a flexible supply and is used for on-chain payments and rewards. This design can achieve a balance between economic activity growth and token supply, forming a positive feedback loop.

However, the dual-token model is not without its flaws. The design of certain protocols may have vulnerabilities, as evidenced by the previous collapse of the Terra blockchain, which exposed the potential risks of its dual-token system. Therefore, caution must still be exercised in evaluating and designing new models.

Nevertheless, the dual-token model provides a viable solution to the contradiction between the use and holding of Crypto Assets. It not only incentivizes users to actively participate in network activities but also protects their long-term interests. With the continuous development of blockchain technology, this innovative economic model may see broader application and validation in the future.