Because of a hot topic inside the ShidenDAO community and the Astar community. The founders of ShidenDAO would like to make a proposal that will benefit the Shiden community and help with the deflation of Shiden. This discussion and outcome will also be used as research/data for a burning mechanism later for Astar Network.
It was already discussed in several topics here in the forum: here and here.
This proposal will consist of 3 burning events and a buyback campaign. We want to propose the following solution for the first phase:
Burn 100% of the transaction fee: the current burn mechanism burns 20% of the transactions, and the rest goes to the collator that produced the block. We want to increase the 20% to 100% so that all transaction fees will be burned in the network.
Burn unclaimed rewards from delisted dApps from dApp Staking: as noticed, many more proposals pop up to delist inactive dApps from Shiden dApp staking. This proposal will burn all the rewards not claimed by the dApp after being delisted.
Burn 10% of treasury at the end of each quarter: a part of the block rewards currently goes to the treasury. This proposal is to burn each quarter 10% of the treasury wallet. We also would like to motivate our ShidenDAO community to create a great way to use our treasury in the next phase.
Buyback of SDN: to increase activity on exchanges, Astar will start a buyback campaign for the next months. This buyback will be done by Astar, which can disclose any amount or period during the discussion.
Feel free to share your thoughts and feedback on this proposal.
We would like to create a community voting on OpenSquare for each activity, beginning next week. The suggested activities can change based on the discussion here in the thread.
No tokenomics expert so I can’t really comment on this, but just to learn more and get some reference - is there any reasoning why initially were transaction fees allocated to collators and what percentage of total collator rewards were transaction fees providing?
There is a base reward for collators that you can check on the explorer, everything above is the fee added. This amount is not large for the collators because of low transactions on Shiden. Burning the transaction fee will have no impact on the base rewards for collators.
I agree with this proposal. I would say more than excellent. The important thing, however, is that the incentive to bring dApps to the ecosystems of Astar Network and Shiden Network remains unchanged and therefore make them grow. Let’s remember that the goal for both blockchains is to be sustainable, to incentivize those who want to develop on them but above all to be the main bridges that will allow Japan to switch completely to Web3.
In any case, considering the proposals, I would say that they are excellent because, in addition to encouraging those who develop on blockchains, they also guarantee a deflationary store of value, which, considering the constant and continuous growth of Astar Network and Shiden Network, will make them very solid networks on which larger businesses will be encouraged to plan, develop and invest, as even the tokens themselves will have a strong intrinsic value without market risks from the internal side of the network.
Good question, but it’s something we can’t do for this campaign. Because this is not possible, ShidenDAO proposed other burning solutions. Otherwise, the buyback will have no effect.
The buyback will not be sold on the market but held in the treasury of Astar Foundation.
I would like to share some doubt about publicly saying about buyback and saying when it could happen. I just think that it creates a vector of attack - front-running. If someone knows that Astar Treasury will deliver liquidity in some concrete time window, it creates possibility of withdrawing value (exactly speaking, part of the delivered value to order book) from the protocol by appropriate bots.
I want to underline that I do not know perfect solution regarding my doubt, just wanted to share my thoughts. One of the best solution I am able to recommend, is just not saying openly about time of the buyback.
Support this proposal, this can definitely helps growth of Shiden. Also it might be good to have variable percent for quarter treasury burn, e.g. if community actively use treasure for the last quarter this percent can be less then 10 %, but if there is lack of proposals how to use treasure this percent can be more then 10 %.
