Prop 118: Text Proposal: Introduce a Deflationary Mechanism – Burn 1 BLD per Reward Claim
Summary This proposal introduces a simple and transparent deflationary mechanism for the Agoric ecosystem:
Burn 1 BLD every time staking rewards are claimed.
The goal is to:
Introduce a predictable and consistent supply sink Align network activity with the value of BLD Strengthen the long-term sustainability of the token economy
The mechanism is intentionally simple:
1 reward claim transaction → 1 BLD burned
Motivation
The current BLD token economy has the following structural characteristics:
Continuous inflation through staking rewards Limited mechanisms to reduce circulating supply Low direct linkage between network activity and token value
While staking is essential for network security, there is currently no built-in mechanism where normal user activity contributes to reducing supply.
By introducing a burn tied to reward claims, we create a natural counterbalance to inflation, directly linked to real network usage.
Proposal
When a user executes a staking reward claim transaction:
The standard gas fee remains unchanged An additional fixed fee of 1 BLD is charged This 1 BLD is permanently burned (sent to the burn address) The remaining staking rewards are delivered to the user Rule
1 claim transaction = 1 BLD burned
If a user claims rewards from multiple validators within a single transaction, the burn is applied once per transaction, not per validator.
Why a Fixed Burn Fee
A fixed fee is chosen because it is:
Simple to understand Predictable for users Easy to implement Transparent and consistent
Unlike percentage-based mechanisms, it avoids complexity and variable calculations.
Expected Benefits
- Introduces a Supply Sink
Each reward claim reduces circulating supply.
Example scenarios:
Claims per day BLD burned per day BLD burned per year 1,000 1,000 365,000 5,000 5,000 1,825,000 2. Aligns Network Activity with Token Value
Currently, claiming rewards only extracts value from emissions.
With this mechanism:
Every reward claim also contributes to strengthening BLD.
- Encourages Efficient Claiming Behavior
Users are incentivized to:
Claim rewards less frequently Accumulate rewards before claiming
This may also reduce unnecessary transaction volume.
- Minimal Complexity No changes to staking reward calculations No complex tokenomics introduced Single, clear rule Impact on Delegators
The impact is expected to be minimal:
Rewards continue to accumulate normally Users can optimize by claiming less frequently
Examples:
Rewards Claimed Burn Fee Effective Impact 50 BLD 1 BLD 2% 100 BLD 1 BLD 1% 500 BLD 1 BLD 0.2% Impact on Validators
This proposal does not affect validators:
Validator rewards and commissions remain unchanged No modifications to staking logic or validator incentives The mechanism only applies at the moment a delegator claims rewards Governance Flexibility
The burn amount and activation can be adjusted in the future through governance if needed.
Conclusion
This proposal introduces a simple, transparent, and sustainable deflationary mechanism:
Burn 1 BLD for every staking reward claim transaction
It provides:
A continuous supply reduction mechanism Alignment between network usage and token value Minimal complexity and low implementation risk Discussion
For further comments, feedback, or refinements, please continue the discussion here:
https://community.agoric.com/t/introduce-a-deflationary-mechanism-burn-1-bld-for-every-staking-reward-claim/930/4