# A Burn Proposal **URL:** \ **Category:** Tokenomics\ **Created:** [April 2, 2023, 4:58am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328 "2023-04-02T04:58:40Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![Andy](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/andy/32/5764_2.png) [@Andy](https://forum.cosmos.network/u/Andy)\ **Post date:** [April 2, 2023, 4:58am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/1 "2023-04-02T04:58:40Z")
ATOM tokenomics has always had a problem with the high staking inflation, but there is no function to reduce inflation, reclaim, or burn. While Atom 2.0 had considered reducing inflation, the proposed solution was not ideal and difficult to pass through voting. However, with the launch of ICS and the establishment of the “ATOM economic zone’’, a Pareto improvement solution has been proposed that does not harm any existing parties, but can gradually solve the problem in a controllable manner, and should be able to pass through. Overview of the solution: Within the ATOM economic zone, 50% of the income will be used to buy and burn ATOM, while the remaining 50% will be given to ATOM Stakers. The income can come from ICS chain revenue or economic zone MEV revenue. Impact on stakeholders: 1. To ATOM Stakers : ATOM staking rewards will still be available, and burning has a positive impact on ATOM price, so it is beneficial for ATOM Stakers. 2.To Cosmos Hub: This creates a dynamic tokenomics model with both issuance and burning, with three adjustable parameters to adapt to a changing market: POS inflation rate, community pool ratio, and income used for burning ratio. These parameters can balance the conflicts and contradictions between the community pool/development fund, ATOM Stakers interests, and ATOM price, leading to a positive spiral in ATOM price. 2. For the consumption chain: There is no harm, and as ATOM price rises, the consumption chain will become more secure. Feasibility of the solution: 1 From a voting perspective: This solution is likely to be passed, as it does not harm the current interests of ATOM Stakers but is logically beneficial for the coin’s price. 2 For Cosmos Hub: This is a low-risk iteration and improvement plan, and even if it fails, it will not harm Cosmos Hub. However, if the economic zone develops well, this solution will naturally succeed, making it a valuable infrastructure project. ---
**Author:** ![CosmosMan](https://avatars.discourse-cdn.com/v4/letter/c/ad7895/32.png) [@CosmosMan](https://forum.cosmos.network/u/CosmosMan)\ **Post date:** [April 2, 2023, 6:23am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/2 "2023-04-02T06:23:51Z")
I like this idea, it’s gradual, predictable, aligns the value of $ATOM with the economic zone, and does not harm any party’s interests. ---
**Author:** ![ala.tusz.am](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/ala.tusz.am/32/3375_2.png) [@ala.tusz.am](https://forum.cosmos.network/u/ala.tusz.am)\ **Post date:** [April 2, 2023, 7:21am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/3 "2023-04-02T07:21:55Z")
It’s an interesting idea. However, there is still the need to ensure that validators and delegators are incentivized to secure the network. Without data, this would disproportionately affect smaller validators that need to cover operating costs. Once the ATOM economic zone grows and we have more data, it may be worth revisiting the ways that revenue can be used to further strengthen the Hub. ---
**Author:** ![Hush](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/hush/32/2597_2.png) [@Hush](https://forum.cosmos.network/u/Hush)\ **Post date:** [April 2, 2023, 12:28pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/4 "2023-04-02T12:28:50Z")
I like the proposal. 1. Have you spoken to the liquid staking providers on how this new economic model would affect their own? 2. Inflation control and MEV markets were swatted down with the atom 2.0 proposal, what makes you sure this is an easier sell with certain other parties, skulking around in the shadows, waiting??? ---
**Author:** ![Andy](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/andy/32/5764_2.png) [@Andy](https://forum.cosmos.network/u/Andy)\ **Post date:** [April 2, 2023, 2:24pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/5 "2023-04-02T14:24:43Z")
There is no data available, but it can be observed and evaluated as the Atom economy zone develops. This is an approach to gradually achieve deflation without affecting the current situation as much as possible. Alternatively, if 50% is too high, we can start with 10%. ---
**Author:** ![Andy](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/andy/32/5764_2.png) [@Andy](https://forum.cosmos.network/u/Andy)\ **Post date:** [April 2, 2023, 2:29pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/6 "2023-04-02T14:29:17Z")
Because this won’t affect the interests of current Stakers, this is the key, making it a feasible approach.It’s just an idea and there has been no communication with the LSD-related team. ---
**Author:** ![common\_spelling](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@common\_spelling](https://forum.cosmos.network/u/common_spelling)\ **Post date:** [April 2, 2023, 4:12pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/7 "2023-04-02T16:12:31Z")
it was my impression that unaccountable DAO treasuries and implication of unnecessarily high salaries for council gate keepers were swatted down with the 2.0 proposal. LSDs bringing down inflation over time is an inevitability of their existence, 2.0 sought to speed it up with sudden dilution of stake holders and installing untested LSD providers instead of making them compete for market share. @andy can you elaborate further on the mechanics being proposed here: > [@Andy](#): > > 2.To Cosmos Hub: This creates a dynamic tokenomics model with both issuance and burning, with three adjustable parameters to adapt to a changing market: POS inflation rate, community pool ratio, and income used for burning ratio. and how this will work: > [@Andy](#): > > These parameters can balance the conflicts and contradictions between the community pool/development fund, ATOM Stakers interests, and ATOM price it seems there is no conflict between CP/development fund and atom staker interests. It is in the interest of the stakers to fund development through the community pool. the conflict is validator nepotism and corruption in fund distribution. this apparent conflict has lead to a push for less accountable centralized DAO treasury systems rather than more decentralized and transparent quarterly ranked-choice funding rounds that align with the communities desires instead of the nepotistic flailing of a council gate keeper. ---
**Author:** ![Hush](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/hush/32/2597_2.png) [@Hush](https://forum.cosmos.network/u/Hush)\ **Post date:** [April 2, 2023, 4:32pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/8 "2023-04-02T16:32:05Z")
> [@common\_spelling](#): > > it was my impression that unaccountable DAO treasuries and implication of unnecessarily high salaries for council gate keepers were swatted down with the 2.0 proposal. Well then you were not paying attention… What section of the Atom 2.0 proposal even insinuated these assumptions? These ideas are so far out of left field, they seem laughable. Any group doing work would like to be paid and even now persons managing the treasury are being paid. You would need to justify the claim of unnecessarily high salaries and explain why that isn’t the case right now. > [@common\_spelling](#): > > LSDs bringing down inflation over time is an inevitability of their existence, 2.0 sought to speed it up with sudden dilution of stake holders and installing untested LSD providers instead of making them compete for market share. Not even going to write a response, since none of what you said is even hinted at in the proposal, so it seems this is something you just plain made up. ---
**Author:** ![Andy](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/andy/32/5764_2.png) [@Andy](https://forum.cosmos.network/u/Andy)\ **Post date:** [April 2, 2023, 4:39pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/9 "2023-04-02T16:39:16Z")
> [@common\_spelling](#): > > LSDs bringing down inflation over time yes,but we can do better,A robust currency system should have both the function of issuing and withdrawing currency. IMO，ATOM Stakers include validator，Although nominally Atom Shakers and Validators are two different groups of people, they form a collective when it comes to voting and can consider issues together. ---
**Author:** ![Andy](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/andy/32/5764_2.png) [@Andy](https://forum.cosmos.network/u/Andy)\ **Post date:** [April 2, 2023, 4:42pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/10 "2023-04-02T16:42:46Z")
If inflation is directly lowered, it may not only be subject to the voting process but also lead to a shortage of funds in the community pool. Therefore, we introduce the function of burning in the new economic zone, which enables the entire token system to operate in a benign manner. ---
**Author:** ![Andy](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/andy/32/5764_2.png) [@Andy](https://forum.cosmos.network/u/Andy)\ **Post date:** [April 2, 2023, 4:46pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/11 "2023-04-02T16:46:18Z")
To ATOM 2.0，I vote yes .The greatest significance of 2.0 is to provide the direction rather than the specific implementation method. For example, proposals such as adding a community pool can be implemented and are better ways to implement the direction provided. Directly lowering inflation and allowing Stakers to vote on it is similar to voting in favor of increasing taxes, which obviously has better alternatives. ---
**Author:** ![common\_spelling](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@common\_spelling](https://forum.cosmos.network/u/common_spelling)\ **Post date:** [April 2, 2023, 6:16pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/12 "2023-04-02T18:16:59Z")
> [@Hush](#): > > Any group doing work would like to be paid and even now persons managing the treasury are being paid. You would need to justify the claim of unnecessarily high salaries and explain why that isn’t the case right now. I base this on the assumption that DAO treasury systems would be stupid large given no current budget proposal to base fund distribution on and the assumption that the larger the treasury the larger the salary required to keep them from stealing it. combined with the fact that a DAO responsible for distribution and in control of all community pool funds is entirely unnecessary with ranked choice voting to distribute funds solves these issues by limiting risk of theft or waste and making predictable the nominal value of funds available to any one council based on community sentiment and desire and reflected on chain. > [@SubDAO Treasury System for the Hub](https://forum.cosmos.network/t/subdao-treasury-system-for-the-hub/10110/10): > > Funding can be made transparent, predictable, accessible, decentralized and eliminate the need to pay treasury managers using existing governance mechanisms to direct the chain by market forces. > > Starting with an annual governance vote to assign a budget as a % of the community pool or $ amount of development funds to be distributed across general categories of funding like infrastructure 40%, innovation 20%, marketing 10%, ecosystem 30% as an example, > projects that want community pool funding then campaign for their project to the community to support their project in a semi-annual ranked choice voting where the top 3 or 10% or other is granted a vested award allowing funds to be revoked through a confirmation vote before the next round of funding is voted for. \*could also distribute additional vested awards if you move up significantly in rank from one award to distribution vote or other incentive structure. > > This makes the funds validators will inevitably pay themselves through governance predictable in their regular governance distribution, transparent and goes to someone with a strong reputation in the community. this system incentivizes community growth through outreach to get the best funding. > > Half the annual allocation of CP funds could be converted into a stable coin over 6 months to reduce price impact on ATOM > > The funds would be available to anyone who applies and vested funds are awarded based on the top ranked teams in their class. > > If devs and validators want to be funded well from the community pool, they should have to work for it. ---
**Author:** ![common\_spelling](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@common\_spelling](https://forum.cosmos.network/u/common_spelling)\ **Post date:** [April 2, 2023, 6:28pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/13 "2023-04-02T18:28:27Z")
> [@Andy](#): > > ATOM Stakers include validator，Although nominally Atom Shakers and Validators are two different groups of people, they form a collective when it comes to voting and can consider issues together. Validators do control the vote, forming an oligopoly within the cosmos. your proposal is beneficial to them in that it helps maintain or raise the price of the tokens they dump to pay their bills at no expense to themselves, and i assumed was the reason you said: > [@Andy](#): > > Feasibility of the solution: > 1 From a voting perspective: This solution is likely to be passed, as it does not harm the current interests of ATOM Stakers but is logically beneficial for the coin’s price. what direction did 2.0 provide? ---
**Author:** ![Andy](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/andy/32/5764_2.png) [@Andy](https://forum.cosmos.network/u/Andy)\ **Post date:** [April 3, 2023, 5:24am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/14 "2023-04-03T05:24:42Z")
Can you provide practical suggestions for constructive discussion of a proposal that cannot solve all problems, and for evaluating proposals based on their potential to bring improvement rather than simply repeating criticisms that the proposal cannot address fundamental issues? ---
**Author:** ![common\_spelling](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@common\_spelling](https://forum.cosmos.network/u/common_spelling)\ **Post date:** [April 3, 2023, 8:35am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/15 "2023-04-03T08:35:41Z")
if i can get more information > [@common\_spelling](#): > > @andy can you elaborate further on the mechanics being proposed here: > > > [@Andy](#): > > > > 2.To Cosmos Hub: This creates a dynamic tokenomics model with both issuance and burning, with three adjustable parameters to adapt to a changing market: POS inflation rate, community pool ratio, and income used for burning ratio. ---
**Author:** ![Hush](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/hush/32/2597_2.png) [@Hush](https://forum.cosmos.network/u/Hush)\ **Post date:** [April 3, 2023, 10:05am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/16 "2023-04-03T10:05:26Z")
> [@common\_spelling](#): > > I base this on the assumption that DAO treasury systems would be stupid large given no current budget proposal to base fund distribution on and the assumption that the larger the treasury the larger the salary required to keep them from stealing it. combined with the fact that a DAO responsible for distribution and in control of all community pool funds is entirely unnecessary with ranked choice voting to distribute funds solves these issues by limiting risk of theft or waste and making predictable the nominal value of funds available to any one council based on community sentiment and desire and reflected on chain. 🤨 ---
**Author:** ![tom](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/tom/32/4958_2.png) [@tom](https://forum.cosmos.network/u/tom)\ **Post date:** [April 3, 2023, 3:25pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/17 "2023-04-03T15:25:37Z")
assumption + assumption + assumption = certainty, sometimes. in some parallel worlds. ---
**Author:** ![common\_spelling](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@common\_spelling](https://forum.cosmos.network/u/common_spelling)\ **Post date:** [April 3, 2023, 4:31pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/18 "2023-04-03T16:31:01Z")
Is there a point you are trying to make? One is not apparent within your failed attempt. Other than your own existence, everything is an assumption. I can further support my assumptions, if you would like. ---
**Author:** ![zander\_peng](https://yyz1.discourse-cdn.com/flex031/user_avatar/forum.cosmos.network/zander_peng/32/4977_2.png) [@zander\_peng](https://forum.cosmos.network/u/zander_peng)\ **Post date:** [April 5, 2023, 1:58am UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/20 "2023-04-05T01:58:51Z")
In fact, High inflation is killing ATOM. The purpose of inflation was making more people to stake,but too high inflation make more people to sell their ATOM,then more less people want to stake. it will become death spiral. It’s time to change if ATOM want to make great like BTC and ETH, Both of them are low inflation. Relative to burn 50% income, reduce 30% per year income of Staker reasonable ---
**Author:** ![common\_spelling](https://avatars.discourse-cdn.com/v4/letter/c/d2c977/32.png) [@common\_spelling](https://forum.cosmos.network/u/common_spelling)\ **Post date:** [April 5, 2023, 11:29pm UTC](https://forum.cosmos.network/t/a-burn-proposal/10328/21 "2023-04-05T23:29:18Z")
isnt inflation the rate at which your liquidity is returned to you in exchange for locking up through staking? Liquid staking will result in the same cycles you describe where more LSDs = lower inflation → more unbonding = higher inflation → more staking & repeat, until LSD providers own all the chains/top LSD validators own/control all the chains…assuming they can eventually fix the LPs or make LSDs worth their risk. [Next page](https://forum.cosmos.network/t/a-burn-proposal/10328.md?page=2)