Following up the discussion for proposal #258, the decision was made to split implementing the on-going token burning logic from the handling of the usage incentives pool, which were originally supposed to be brought on chain at the same time. As a follow-up, the team together with the validator community has decided to bring forward two proposals for how to proceed with the pool balance of ~136M EVMOS: Burn them or transfer them to the community pool. This proposal is concerned with the former option.
Proposed Solution
Burn the ~136M EVMOS in the user incentives balance in the next upgrade (v16) by removing them from circulation.
Pros
Tokens haven’t been used effectively for their initial purpose and therefore we don’t need to keep them in the total supply.
Burning the tokens would decrease the total and circulating supply, thus making the project significantly more attractive for onboarding new users.
It creates a positive narrative by burning such a large amount of unused tokens from the total supply.
The community pool already has ~100M EVMOS tokens to allocate for incentives and other initiatives. Developer teams have already preferred to use the Community Pool to request funds for their corresponding incentives programs (eg. UniDex, Forge, Tashi, etc).
Cons
Burning the tokens would miss the opportunity to reuse the tokens in different ways that could be more effective in the long term (liquidity incentives, grants, etc).
Tokens are not currently “in circulation” even though they are included in the circulating supply.
The concern is that burning the tokens would reduce the community-governed tokens (Community Pool + Usage Incentives Pool).
The burned amount would increase the ratio (%) of tokens owned by the Evmos Foundation (Strategic and Team Allocations) compared to the total supply.
Voting Options
This is one of two proposals, which are put to vote to decide on the matter laid out on Commonwealth. The resolution of both proposals will happen as follows:
If only one of the two proposals passes, that proposal will be automatically selected for the next upgrade.
If both proposals pass, the one with the largest voting power (i.e. votes) will be selected and the other one will be discarded.
If none of the proposals pass, a new discussion process will need to be initiated with the community to decide the future of the Incentives Pool tokens. Note that since prop #258 has already been approved, the pool won’t keep accumulating new tokens from inflation.
