Projects generally want to give incentives for various actions performed. Those might include:

Staking
Providing liquidity
Performing certain platform actions (e.g. trading, playing a game, etc.)
Being a validator (for L1 blockchains and other use cases)

At the same time running out of tokens to award for those actions can be an actual problem. Especially if the inflow of tokens is less than the outflow of tokens. So how should projects balance this? Some options might include careful balance of inflows and outflows, ongoing token inflation or the use of real yields. However, none of those approaches are optimal, as they either rely on a lot of assumptions, create additional selling pressure or are suboptimal in bootstrapping the early days of the project.

Still not sure which direction to take?