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[TIP-004] Change the distribution of ThorSwap revenue

Voting ended over 2 years agoSucceeded

🔗 TIP-004 Forum Discussion

THE PROPOSAL

Voting yes on this proposal would mean a vote for distribution of revenue in the following proportions:

-25% for Treasury (as it was)

-25% for buybacks and burning (new)

-50% for vTHOR stakers (it was 75%)

Summary

This proposal is to introduce an additional burn mechanism directed to circulating supply. While we already have mechanism directed to FDV (TIP-001 and 003), circulating supply is also important criteria for investors.

Abstract

Change the distribution of THORSwap revenue. Reduce part of vTHOR stakers revenue to start a new burning program.

Motivation

Burning crypto refers to a deflationary process that permanently removes cryptocurrency tokens from circulation. This is done to decrease the total supply of a digital asset to boost tokenomics sustainability.

Benefits

Introduces an additional recurring burn mechanism that is directly tied with trades volume and circulating supply.
Crypto investors love burning mechanics
Doesn't kill current yield

Drawbacks

There are regulatory uncertainties around the practice of introducing a mechanism to use protocol profits generated from affiliate fees and promising buyback-n-burn. Other comparable protocol burn mechanisms do this at a permissionless smart contract level (ie. BNB automatically burning based on network gas fees) rather than on a regular manual basis.
Decreasing vTHOR Staker fee share distribution from 75% to 50%, which means staking APY will drop around 1-2% based on historical data, while bought from the market and burned at 25% of revenue could offset this. Source of historical data | credit: cryptoactuary.

Off-Chain Vote

For

2.19M THOR18.9%

Against

9.38M THOR81.1%

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Discussion

[TIP-004] Change the distribution of ThorSwap revenue

Timeline

Aug 08, 2023Proposal created

Aug 08, 2023Proposal vote started

Aug 18, 2023Proposal vote ended

Sep 18, 2025Proposal updated

Drawbacks

There are regulatory uncertainties around the practice of introducing a mechanism to use protocol profits generated from affiliate fees and promising buyback-n-burn. Other comparable protocol burn mechanisms do this at a permissionless smart contract level (ie. BNB automatically burning based on network gas fees) rather than on a regular manual basis.

Decreasing vTHOR Staker fee share distribution from 75% to 50%, which means staking APY will drop around 1-2% based on historical data, while bought from the market and burned at 25% of revenue could offset this. Source of historical data | credit: cryptoactuary.