Token Burn Proposal

Proposals
5

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:

  1. 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.

  2. 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.

  3. 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?

  4. 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?

  5. 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!

2 Likes