Coin Edition -
- Klaytn Foundation submitted a proposal to burn over 5 billion KLAY tokens.
- 2 billion KLAY will be set aside as “Klay Value Creation Reserve”.
- All transactions from the reserve will be approved by the Klaytn Governance Council.
According to a tweet by Collins Wu, a Chinese blockchain reporter, the Klaytn Foundation has submitted a new proposal to the Klaytn Governance Council (GC). The proposal aims to optimize and revise the tokenomics of Klaytn, and enable the project to secure a more sustainable and verifiable token economy.
The KLAYTN Foundation initiated a KGP-6 proposal, 7.281 billion unspecified Reserve Klay Token was immediately destroyed by 5.281 billion (73%); the remaining 2 billion KLAY would be destroyed within 3 years. https://t.co/XPk1RsLznP..— Wu Blockchain (@WuBlockchain) February 22, 2023
The new proposal tagged the KGP-6 proposal will destroy 7.281 billion undesignated KLAY tokens and designate a balance of 2 billion tokens as the “KLAY Value Creation Reserve” for three years tentatively. The foundation also wants to seize the opportunity to restructure the treasury management system of the Klaytn ecosystem.
Kakao, the South Korean internet provider, developed Klaytn. It is a protocol designed to enable businesses to customize and operate their service-oriented blockchains built atop Klaytn architecture.
Upon launching the Klaytn mainnet, the project minted 10 billion KLAY tokens during the Token Generation Event (TGE). Having passed through several integrations over the years, the total supply of KLAY tokens increased, reaching 11.001 billion as of the time of the proposal. Out of this total amount, only 3.073 billion KLAY are in circulation.
Of the remaining 7.478 billion KLAY tokens, the Klaytn Foundation proposes to transfer 0.197 billion KLAY to a separate wallet. Klaytn will use this for settlements with GroundX, as per the original agreement. Once the transfer is made, the Foundation will be left with a balance of 7.281 undesignated tokens, of which 5.281 billion KLAY will be burned and permanently removed from the supply.
The burning of tokens will leave the project with 2 billion KLAY that the foundation proposes to be used to run the ecosystem for three years. The batch will be called “KLAY Value Creation Reserve”, and will run within the ecosystem for activities that will help to facilitate deflationary economics.
According to the proposal, the GC will approve all transactions from the reserve. Also, all discussions over using the KLAY Value Creation Reserve will be performed in public forums, and decisions will base upon on-chain voting.
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