$AVAX Breakdown: Where the Money Comes From, Where It Goes, and What Gives It Value

【Issuance Mechanism】Mainnet launched in 2020. Initial annual inflation started at 7.5% and adjusts dynamically based on the staking ratio (long-term target: <10%); there is no hard cap.

【Revenue / Sources of Value】Subnets are customizable L1s focused on institutional on-chain funds and RWAs; validators and subnet deployments consume AVAX.

【Burn Mechanism】80% of each transaction fee is burned, while 20% goes to validators—an inbuilt deflationary engine.

【Core Model】A high-performance PoS L1 led by Ava Labs, differentiated by its “customizable subnets.”

In a nutshell: It uses subnets to capture institutional demand for customization. Bull case = RWA and institutional chains gain traction; bear case = subnets operate in silos and liquidity becomes fragmented.

(The above is for educational purposes about the mechanism, not investment advice. DYOR.)