BIP-47: Ending the Burn

Summary

Please note that this Snapshot has a default 72 hour voting window.

BIP-47's Snapshot proposes to end the current burn taking place at the end of every auction round.

Note: This BIP proposes to leave the burn bot active in Discord. This will allow community members to perform random acts of burning, as a node to the symbolic ritual we once had.

Rationale

At Botto’s inception, Botto operated under a buyback and burn (BB&B) program, where all ETH earned from auction sales was used to buy $BOTTO from Uniswap. These tokens were then sent to a burn address.

This was problematic for several reasons, the main one being that we accrued no ETH to the treasury, which at the time consisted only of $BOTTO tokens. It was voted in BIP-06 to stop buying back $BOTTO, and to instead accrue the ETH proceeds from auctions in Botto's treasury, and to burn an equivalent amount of $BOTTO from the treasury.

This was a conservative way to maintain the burn narrative, but it came at an important cost. In the past 365 days, we have burned over 1.8M $BOTTO, approved the swap of 8M $BOTTO to fund the project (≈30% of treasury $BOTTO), budgeted 1.2M $BOTTO for contributors and community initiatives, and budgeted to burn 2M $BOTTO in 2024. This will take us from 30M $BOTTO tokens in December 2022, to 21M in December 2023, and to a projected 14M in December 2024 if we swap the full 8M $BOTTO (as I expect we will), a 53% reduction in just 2 years.

This is not a sustainable path for a project that aims to create the first immortal artist.

Unlike a company that can issue new stock indefinitely, we cannot increase the max supply of $BOTTO. Its importance cannot be overstated: our $BOTTO is a strategic asset required to build the first DAA, so let’s use it strategically.

Burning our most scarce asset is a bad idea, especially today, when the project is not profitable and we don’t know how long the bear market will last, or whether the token price will increase. We should be extra careful with how we use our tokens.

To provide some numbers, over a 12 month period, we've burned about $590,000 worth of $BOTTO (at today's price), or $392,000 (at monthly close price of $BOTTO). Unlike with buybacks, the value did not accrue to token holders, or to Botto; it was destroyed.

1. The burn depletes the treasury from $BOTTO tokens which are increasingly scarce, which are likely to accrue in value, and which are required to fund the project;
2. The burn narrative is no longer an important part of our story;
3. There are no tangible ROI or benefit to burning from the treasury;
4. The burn is a poor use of the team’s time;
5. Ending the burn makes Botto simpler;
6. If we had no burn in place, it is unlikely we would implement it at this stage.

Proposal Specifications

• Stop burning $BOTTO tokens after each auction, starting with the next Period;
• Update the Docs, specifically the Auction, Rewards, and Treasury pages.

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For additional information on the points covered in this Snapshot, please refer to the Governance Forum thread that contains explanations of each line item above.

Explanations & Details: BIP-47: Ending the token burn