From the Digifinex blog.
TON Foundation’s Proposal: Burn Mechanism
The Open Network (TON) Foundation has proposed introducing a burning mechanism that would destroy 50% of all transaction fees on the TON network. The rest, as usual, will go to validators, who will continue to earn staking rewards for helping maintain the network. A community vote on the proposal is scheduled for June 15.
TON Blockchain: Backed by Telegram and the TON Foundation
Developed by Telegram, the popular messaging app with over 700 million users worldwide, the TON blockchain has now been handed over to the developer community at the TON Foundation. The Foundation has recently proposed “tokenomics deflation” by destroying 50% of all transaction fees on the TON network.
TON’s Proposal: Destroy 50% of Transaction Fees
According to the proposal, if the burn mechanism is implemented, 50% of the “transaction fees” of these tokens will be destroyed when users make transactions on the network. The rest, as usual, will go to validators, who will continue to earn staking rewards for helping maintain the network.
The Proposal: Community Approval and Voting
The proposal needs the approval of the majority of TON validators to take effect. It has already been submitted to validators and is under discussion. The network-wide vote to initiate this feature is scheduled for June 15.
（Image via BlockTempo）
Potential Impact on TON’s Inflation Rate
Although this strategy resembles Ethereum’s EIP-1559 upgrade, the burning mechanism has a smaller impact on TON’s inflation because, compared to Ethereum, TON’s transaction fees make up a smaller proportion of the network’s economy. This means TON’s network economy is more reliant on staking rewards for support, rather than controlling inflation through a burning mechanism.
Statement from TON Foundation’s Core Developer
Kirill Emelyanenko, a core developer at the TON Foundation, stated, “In the short term, this deflationary impact may seem small, with approximately 350-400 Toncoins being burnt every day, while the number of Toncoins issued daily is 71,000. However, as network transaction volumes increase, this figure could significantly increase, making the deflationary effects on total and circulating supply clearly visible.”
Additionally, Kirill Emelyanenko pointed out that the TON Foundation suggests setting the burn ratio at 50%, but ultimately, this will depend on the decision of validators and the community.
Keywords: TON Foundation, burn mechanism, transaction fees, TON network, tokenomics deflation, Ethereum’s EIP-1559, validators, staking rewards, Kirill Emelyanenko.
The article is quoted from: Telegram區塊鏈》TON基金會建議「銷毀50%」交易手續費、增加通縮
This article came directly from the Digifinex blog, found on https://blog.digifinex.com/2023/06/05/ton-foundation-proposes-a-burn-mechanism-aiming-to-destroy-50-of-all-transaction-fees-on-ton-network/