# kaal:claim:3396542-008

**Claim.** Because newly minted reward tokens go only to agents who stake tokens on policies, passive holders are diluted over time, which pushes agents toward active underwriting while still permitting passive investment.

**Type.** mechanism  **Support.** argued

**Holds when.**

- reward tokens minted per policy underwritten

**Source quote.**

> Thus, the total number of tokens grows over time. This implies that "passive" agents who hold the tokens purely to receive a share of future premia will find their proportional ownership in the DAO decrease over time.

**From.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, *Decentralized Underwriting* (2019), II. The Design of the Underwriting DAO, page 5

**Cite as.** Craig Calcaterra, Wulf A. Kaal, Vadhindran K. Rao, Decentralized Underwriting (2019). SSRN: https://ssrn.com/abstract=3396542

**Verify.** sha256 of source PDF `ce2bda03a0b788ea3e7747f02c3c351ef7c808a41150d5cda34767bbe98800c0` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Calcaterra%20et%20al.%20-%202019%20-%20Decentralized%20Underwriting.pdf

**Topics.** tokenomics, risk-and-incentives, dao

**Keywords.** token-dilution, incentive-design, passive-holders, dao-design

**Related claims.**

- restated_by: https://wulfkaal.github.io/claims/3782216-015

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