[1IP-3] Snapshot Proposal: VOTE to make $1INCH deflationary!

1IP-3 Forum Post

Summary

Implementing a strong deflationary mechanism to the 1inch token.

Abstract

Removing Single-Asset-Staking & Farming Completely. Replace with a deflationary mechanism.

Motivation

This eliminates sell pressure from the stakers as well, and everybody is incentivised as the supply decreases = more valuable… Holders will be more committed to hold the token, instead of farming/staking and then selling the token, which decreases the value of the token.

Specification

Removing Single-Asset-Staking & Farming Completely. Replace with a mechanism where users stake $1INCH tokens and get incentivised to access governance + instead of receiving rewards, the stakers will collectively help burn $1INCH tokens (deflationary pool). Deflationary pool which users will stake their $1INCH and will determine the burn speed/rate. Essentially the traditional staking rewards will now go into a deflationary pool and get burnt.

Benefits

The main benefit is that the community basically decides the burn rate, the more people who stake $1inch tokens the more it will be deflationary. If in any case, less people stake, the burn rate will slow down significantly, so it’s continuously up to the 1inch holders for it to be as deflationary as they want it. It empowers holders more, and takes rewards away from “whale” holders. It is evident that most people who stake/farm usually dump the token which currently plays a significant role in the tokens value. With this mechanism, you can have the best of both worlds, making it “stake-to-burn” rewards HOLDERS. It encourages more value to the token.

Drawbacks

A potential drawback could be that some people may be upset in regards to removing staking / farming, especially the single asset staking. In the long term this is actually very healthy for the 1inch ecosystem. We need to start building 1inch’s future now. The distribution on 1inch currently in my opinion is successful, very successful in fact. But the staking is really decreasing the token value.

Imagine if it was deflationary but still rewarding holders.