Here is the summary of the thoughts from earlier comments;
- Burning non-circulating tokens does not help
- Treasury and grant programs are crucial for growth
- Burned vs not burned is not enough amount, not fast enough (in months rather than years)
- Confirmation from Foundation that no release from 30 Million
- Can ringfence 5 Million if Foundation is nervous about funding
- We are preventing future supply/ dilution
- Team thinking too long term and not short term
- Too cautious, not bold enough, burn all 30 Million
- Burn based on market cap
- Continue burn beyond 30 Million based on market cap over and above monthly tx fee burn
Here are some of the thoughts on the comments and the potential options for the burn;
Burn beyond 30 Million
This should not be in question at this stage of the project. Value of MTRG is a result of supply and demand. Focusing on supply while suggesting to remove ability of Meter Foundation to grow and generate demand by burning additional tokens is not advisable. Scarcity of MTRG is futile without demand for MTRG. Thus, any additional burn should not be part of the discussion now.
Burn based on Market Cap
This is tied to the comment above and the growth narrative. Emission based on market cap makes sense as it aids growth of the ecosystem. Burn based on market cap by definition hinders the potential for growth – reduces market cap further through burn, removes MTRG from treasury that could have been used to support and grow the ecosystem; and thus is antithetical. In addition, it adds further uncertainty to the tokenomics. It is important to note that all transaction fees are also used to burn MTRG.
Burn at low valuations
Higher the burn at low valuations, lower the significance. That was one of the key rationale behind prolonged burn.
We could make changes to the current proposal to limit the maximum emergency fund to 5 Million MTRG to be used within 5 years.
Burn from non-circulating supply
Some of the community members are strongly proposing burning all 30 Million tokens at once. This leaves a lot of marketing communications to chance!
Here is a simple thought process of any sophisticated investor - Meter ecosystem is burning 30 M tokens? How does it impact float and FDV? What is the real value of the burn? – The only positive response here is reduction in FDV. So we collectively are not fully aware of the marketing impact of the burn. Should we then go ahead and burn all the tokens not knowing how it will impact the new user perception? That is a lost opportunity if the new user sentiment is not favorable.
Too cautious, too long term, not too bold
It is important for the community to embrace the fact that - It is worthwhile to err on the side of caution than have a shortfall of funds to fuel growth. Given the growth of blockchain ecosystem as a whole, we believe that the Meter ecosystem will need commensurate investment into the ecosystem to grow. As such, the ability to grow and generate demand should outweigh need of scarcity. Also, note that the community is the main beneficiary of any incentive programs/ token release from the foundation.
Token Releases focused on Community
Any emission from Meter Foundation funds for growth is primarily directed towards community. This has been our guideline for all dApps that launch on Meter. Community members participating in validation, staking, and liquidity on dApps are and will be rewarded.
Based on the comments above, though we still believe our proposal is beneficial to the ecosystem in the long run, We propose below potential options to honour the community voice;
- Burn 30 M now
- Burn 25 M now, ringfence 5 M for growth (max 5 years)
- Burn 10 M now, 1 M quarterly for 5 years + emergency fund limited to 5 M
We really hope community understands the importance of providing the Meter Foundation with sufficient arsenal to ensure growth is not sidelined vis-à-vis potential scarcity.
- Burn 30 M now
- Burn 25 M now, ringfence 5 M for growth (max 5 years)
- Burn 10 M now, 1 M quarterly for 5 years + emergency fund limited to 5 M