The Idea is that token allocations to EM innovators leads to inflation on Lisk. This doesn’t mean that funding EM builders is wrong in itself but that the Lisk Reserve is mainly denominated in $LSK and all LSK allocations end up on exchanges where $LSK is sold for USDT. (you could even use the word DUMPED!!)
The more this happens, the more $Lsk falls in price against USDT. If the funding for EM builders (or any other initiatives) comes from a BTC or ETH reserve then funding initiatives won’t have a direct consequence on Lisk price - (we used to have these before migration, don’t know what happened to that).
You might think that falling $LSK price is a problem only long term holders should worry about, but here is the thing; For every LSK that hits the market curtesy of builder grant, the next grant becomes more expensive to fund.
I tried to explained this here
If we fix price action, we will not need to give out so much $LSK because even though the supply of $LSK is reduced by burning, the net $$ value of reserve $LSK will be significantly higher than it was before the burn.
Note that the final destination of all Lsk given out as grant or incentives is on the exchanges where it is dumped, further devaluing $LSK
Don’t forget that growing the value of $lsk/usdt instantly attracts investors thus creating a flywheel of scarcity and demand.
Say we manage to get LSK prices back to $2/Lsk, we will need only 25,000 Lsk to get the same level of funding we currently have with 100,000 lsk @ $0.5/Lsk
I support burning because it is the only combination of events that ensure that prices improve. If we don’t burn and keep liquidating Lsk for usdt to fund programs, no matter what success these EM builders achieve, we will continue to run low of funds to sustain our support!
Unsustained support is the same as No Support at all
I hope this makes sense??