Crypto News

Klaytn Foundation Plans Token Reduction by Burning 5.28 Billion KLAY Tokens

Klaytn blockchain has put forward a tokenomics optimization proposal

Klaytn Foundation, a leading developer and code maintainer of the Klaytn blockchain, has put forward a tokenomics optimization proposal to its Governance Council (GC) in a bid to enhance the sustainability and value of KLAY tokens.

The GC, a group of network participants who oversee the governance of the Klaytn network, will vote on the proposal from February 22nd to February 28th.

The proposal includes a series of short-term tokenomics improvements, including the initial burning of 73% of the reserve supply, equivalent to 5.28 billion KLAY tokens, or approximately 48% of the current total KLAY supply.

This move will enhance transparency in information disclosures and modify the management structure of ecosystem resources.

To date, Klaytn Foundation has burned over 75 million KLAY through strategic buybacks and the burning of gas fees, and currently, around 3.073 billion KLAY is in circulation.

Out of the initial minting reserve of 7.48 billion KLAY, the Foundation plans to initially burn 5.28 billion KLAY that has remained unused in the last three years and eight months.

Approximately 200 million KLAY that has already been contracted to be paid to GroundX, the subsidiary that developed the Klaytn blockchain, for infrastructure development, network operation, and management services will be transparently executed.

The remaining 2 billion KLAY will be designated as the “KLAY Value Creation Reserve,” which will only be channeled towards use cases and scenarios that will help facilitate deflationary KLAY tokenomics. Such tokenomics are intended to create long-term value for KLAY tokens.

“The Foundation looks to increase KLAY demand in a few ways: first, increasing on-chain interactions by collaborating with major portfolio projects as well as fostering services within the Klaytn ecosystem, especially dApps that look to ‘use and burn’ KLAY as their main tokenomics model,” Klaytn said in the proposal.

The foundation aims to increase the utility of KLAY beyond transaction fees by securing infrastructure services that are necessary for the ecosystem, such as oracles, as well as investing in high-growth potential projects necessary for the Klaytn ecosystem.

These investments will channel returns back to the ecosystem and leverage said returns to expand KLAY demand.


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