EQUIP-1: Burn Mechanism Proposal

Although the full-scale launch of Equation DAO Governance is scheduled for December 2023, we have already implemented preliminary governance features: users who stake EQU receive an equivalent amount of veEQU on a 1:1 basis. Until the comprehensive governance system is fully operational, veEQU will serve as the sole basis for governance voting.

Our first Equation Improvement Proposal, EQUIP-1, focuses on introducing a burn mechanism.

Motivation:

Under the existing mechanism, users have the option to stake their EQU mining rewards or sell them on the market. Those who choose to stake and lock their EQU demonstrate long-term confidence in our project, as opposed to those opting to cash out immediately. However, our current reward mechanism, while supportive, still does not adequately align with the interests of long-term investors, leading to continuous selling by short-term profit-seekers and adversely affecting loyal long-term investors.

The proposed burn mechanism aims to address this issue. It not only burns a portion of the rewards not committed to longer-term staking but also seeks to reduce the maximum supply of EQU. This strategy is designed to further benefit EQU holders by potentially increasing the value of their holdings, thereby encouraging and rewarding long-term investment in the ecosystem.

Specification:

Based on the above table, users with a positive outlook on EQU's long-term growth can opt for a 90-day lock duration to receive 100% of the mining rewards. Users unwilling to lock EQU will only receive 25% of the mining rewards.

Voting for EQUIP-1:

The vote on this proposal is scheduled to start at 10:00 UTC on November 15, 2023, and will last for two days. Should the vote pass, our team will promptly begin deploying the new strategy.