The total supply of FNX tokens are 500 Million. That’s a lot.
There are too many tokens reserved in the future. It is useless and will frighten the potential FNX holders away.
I suggest we could burn some tokens in the reserves, especially the tokens reserved for mining. Maybe like half of them. Because as the current mining rewards, it will take a very very long time to mine them all.
The total supply of FNX tokens are 500 Million. That’s a lot.
I’m on board.
How about we go even further?
Now the total amount reserved for mining is 70%, 350 million.
What if we just keep 35-50 million left and burn the rest. It is going to be a huge burn.
I’m totally on board as well
Love the sound of this! How can we start?
Burning tokens from non-circulating supply is useless. And it reduces flexibility going forward. For me, this is an emphatic NO and an extremely bad and short-sighted idea. It MIGHT cause a temporary pump in the price at best. AT WORST, it leaves us with no way to attract deep enough liquidity to our options pools.
Here are my reasons:
Current FNX token supply is not a lot. HEGIC has a supply of 3,012,009,888 HEGIC, so since this is the closest project to FinNexus, you could say that our current max supply of 469,097,362 FNX is quite small by comparison.
What matters is circulating supply of FNX. Our current circulating supply of 17,900,126 FNX is quite reasonable. What we need is a burn mechanism built into the protocol that burns FNX from the existing supply. Burning from the non-circulating supply does absolutely nothing for us and reduces our flexibility going forward. What if we need to sell those for treasury? What if we need to increase mining rewards? It doesn’t make any sense to burn FNX tokens that are already not circulating.
Limits our potential growth to other blockchains. One of the founding goals of FinNexus is to be a cross-chain DeFi protocol suite. How can we move FNX to other chains if we burn it all now? What if we need to have supply across 10 different blockchains? We already have Wanchain and Ethereum. Elrond and Kardiachain are on the roadmap. If we add Binance Smart Chain, Polkadot, Zilliqa, Tron, etc. (all completely reasonable possibilities), where will FNX supply come from if we burn it? How will we fund mining rewards?
History proves FNX burns have no effect on FNX price. Guys, we’ve already burned over 30 million FNX and that had literally no effect on the price. What makes us think this will be any different?
A massive burn is a desperate move that makes us look bad. To me, a massive token burn is a last-ditch effort to pump the price before giving up on a project entirely. The optics are bad. We have a lot of blocking and tackling to do to improve the protocol before we go down this road: Overhauling the UXUI, implementing vesting of FNX mining rewards, expanding the underlying asset portfolio of the pools (adding things like XRP, LTC, XLM, etc.), starting up on Elrond and Kardiachain, tweaking the mining rewards rates, improving the tokenomics so as to better tie the stablecoin pools to the value of the FNX token… There is literally so much to experiment with before we take such a drastic step as this.
I could go on but I will leave it at these 5 reasons. I dare those in favor of a token burn to try and refute them. I don’t think you can. But let’s have a debate.
To sum up, I am EXTREMELY opposed to a token burn. Now, if we are talking about a burn mechanism embedded into the protocol that slowly and transparently gobbles up FNX from circulating supply, now that is something I could get behind!
Provide reasons for doing this. There are no good ones.
I have to agree with ProfK here. A token burn does make a project look bad and desperate if there is no real need for it. The circulating supply is already very low and I think it was Ryan that said it would take about 100 years to mine all the fnx in the supply. 17m is a low enough number in circulation and the price over time will reflect.
I disagree with Profk on some points. From a potential FNX investor who hesitates to buy FNX, when you look at the circulating supply and compared it to the max supply, it’s very scary. I think the first reaction is to leave because wih such a large supply not yet released the price can only go down. It’s the simple supply and demand law: when the supply > demand the price goes down. What is rare is expensive. What is abundant loses value.
In addition of that, the finnexus team controls the rate of FNX distribution and all the tockenomics. Some weeks ago, you choose to allocate 70% to liquidity providers. That’s good and fair but nothing prevents us that you decide to change again the distribution.
My point is that with so much supply not yet in circulation, people are afraid to invest in FNX because the team can dump the coin and/or because the demand will never surpass supply with such a large amount that still has to be put on the market.
A burn, even with its weak points, will at least reduce this feelings of fear for new potential investors because the probability of flooding the market will be smaller.
Or an alternative: put all the FNX that are not on the market yet in an escrow as Ripple did with their huge bag of XRP.
Reducing potential token supply reduces flexibility for future operations. Yes, I agree. But we need to jump out of the box and think of this problem from the angle of the FNX holders or potential FNX holders.
- FNX token holders or potential FNX holders hate flexibility and uncertainty. They worry that the management team totally controls the FNX allocation. The team reserved 70% of FNX supply for incentives but it is possible to change their mind and dump it on the market. A token burn will show the faith of the team in the future governance from all FNX holders, and make the token distribution more foreseeable.
- Circulating supply of FNX matters, yes. And the total allocation is also important. Circulating supply is from the perspective of FNX traders, but the total plan of the FNX allocation is for the long-term believers who really care about the health and development of the FinNexus platform. Although the to-be-burnt FNX tokens are not in circulation, it may impact much in the long run and it matters much for the decision-making of long-term FNX holders.
- Cross-chain DeFi is always FinNexus’s plan. Burning the idle frozen token will not undermine the goal. We cannot rely on inflation and token-printing to cross-chain to Elrond, Kardiachain, etc. We need to find a healthy solution to jump there.
- The last 30 Million Burn are unsold and converted FNX tokens, and it is a totally different case.
- The proposal for burning tokens is not desperate. It is to build a much healthier tokenomics, and lower the uncertainty to potential FNX holders in the long run. The useless allocated 70% of the token make FinNexus’s distribution redundant and obese. It feels like that the FinNexus team is hiding or reserving some big things under the table in the future. The circulation now is just a tip of the big iceberg. We want to avoid it and be responsible to the FNX holders.
Well, I will vote in favor of the token burn proposal if it goes to snapshot.
Happy to debate
Some great points being made. I’m not sure where I stand on this at the moment. ProfK made some very valid points and so did Ryan. I will just continue to monitor the conversation before making a final decision.
The fact of viewing the total supply and seeing approximately 460 million tokens is a challenge to bet on FNX, on the other hand we see projects like RVX that went up and down, even reducing the supply to 25 million. I think the way forward would be to use these tokens as much as possible as a cashier and pay the CEX top 10 for more listing. It would increase the visibility and price of the token initially. After that, repurchase and gradually reduce with burns. Kind of like Binance did with BNB.
If the concern is what the team will do with the tokens, then we can easily implement a series of time lock smart contracts that sequentially unlock. For example, whatever doesn’t get used from one of these time lock smart contracts for community incentives after one year automatically gets locked up again for another 5 years, or something like that.
The concern from a FNX (potential) holder is knowing that over 17’900’000, more than 450’000’000 of FNX still have to be put on the market. In other words, 25x the actual circulating FNX has still to be put on the market. That’s realy too much!!
It is in my opinion terribly dissuasive because FNX potential buyer knows in advance that his investment will be diluted by a factor of 25!!
Ok you will tell me that I don’t take into consideration the increasing FNX utility and demand over time that compensates this dilution. But the proportion of this increase in value is hypothetical and we can’t evaluate it precisely. In other hand, the dilution is certain.
All in all, the dissuasive aspect of dilution is clearly stronger, for now, than the potential and hypothetical increase in utility and demand for FNX.
In addition, the fact that the FNX distribution is decided solely by the team at its own will adds another factor of uncertainty and risk.
So I am in favor of a large burn in order to keep around 35-50 mio of FNX as Ryan proposed.
How can we start the burn? We don’t need a token supply for 100 years, either this project will make it in the next 5 years or it won’t. We need to everything now to reduce the supply and increase the price dramatically to attract more people to the eco system. Bitcoin had only 21 Million tokens and it the most liquid digital asset. We need to do the same
I think we have to wait that the voting mecanism for FNX holders is implemented. Right @Ryan?
You are right. But we need it dicussed fully before goes for voting
Not just that. The concern is that the current token distribution plan is not healthy and it may frighten potential FNX holders aways. We can make balances on the overall future token allocation plan and the reserves and flexibilities for future development for sure.
How long @Ryan til the voting mechanism is up??
You will get some news in the coming days. Thanks.
These are my personal thoughts on the token burn plan for discussion. Not representing the FinNexus team.
1\ Lower down the amount for future token sale and operation;
2\ greatly lower the community reward reserves for mining; with 25,000,000 units of FNX, I think it is enough for providing attractive mining rewards in the coming 3 years at least. We have only 18M FNX in circulation at present;
With this plan, the total supply of FNX will decrease from 500 M to 150 M, without undermining the future development.
So what do you think?