There are countless governance tokens in the market, but most have fallen into the dilemma of 'governance as a burden'.
I believe the root of the problem lies in the narrow understanding of 'governance'.
After a deep analysis of Lorenzo's economic model, I found that BANK is designed as a more advanced form: coordinated capital.
Traditional governance tokens capture value based on protocol revenue and dividend rights.
But in a protocol with 'sovereignty' as the tone, the core of value does not lie in 'profit', but in 'the coordination efficiency and healthy development of the ecosystem'.
The value logic of BANK is built upon this set of coordinated economics.
Firstly, BANK is **a staking certificate for liquidity routing coordination**.
In a modular architecture, there are multiple liquidity paths and several service providers (such as validating nodes and relayers).
Which paths should receive more liquidity? Which service providers are more reliable?
This cannot be decided solely by a centralized team. Holders staking BANK can vote and rank the priority of routing and the reputation of nodes.
Your voting weight directly affects the efficiency and security of the entire network.
This means that the BANK you stake effectively provides assurance for the network's 'coordination quality,' and therefore you earn incentives.
Secondly, BANK is a targeted guidance tool for cross-ecosystem incentives.
Imagine a new emerging Bitcoin Layer2 needing to guide initial liquidity.
The community can vote with BANK to decide to provide additional BANK incentives for liquidity flowing to that Layer2 over a period of time.
This incentive is not subjectively determined by the foundation, but is a collective decision made by BANK holders based on the prospects of ecological development.
BANK here becomes a 'policy tool' driving capital flow and guiding ecosystem development.
Most importantly, the value of BANK is positively correlated with the 'total coordination demand' of the Lorenzo network.
The more sovereign individuals in the network, the more complex the cross-layer strategies become, and the stronger the demand for efficient and reliable coordination.
As a coordinating medium and collateral for the entire system, BANK's scarcity will be highlighted with the increase in coordination demand.
This forms a unique flywheel:
More sovereign users bring more complex coordination demands, and higher coordination demands enhance the utility and value of BANK, which in turn attracts more participants to join the network to capture coordination value.
Therefore, I believe BANK should not be viewed as a dividend equity certificate.
It is more like the 'capital' of a decentralized central bank, used to implement and maintain a market-based liquidity policy.
Its value ultimately reflects the premium of the entire sovereign liquidity network operating in an orderly and efficient manner.
Holding BANK is not holding shares in an agreement, but holding the core capital of this emerging coordination economy.
@Lorenzo Protocol #LorenzoProtocol $BANK
