Summary
A lock vault that burns a portion of every deposit, removes locked DUST from circulation for the lock duration, and repays principal from protocol buybacks instead of new emissions. Goal: reduce sell pressure from liquid DUST and make supply structurally deflationary.
Mechanism
- Users lock DUST into the vault for a chosen duration.
- A fixed percentage of each deposit is permanently burned at entry.
- Lockers earn boosted staking weight over the existing reward pool and/or DUST sourced from the buyback vault — no new DUST is minted for this vault.
- At maturity, principal is repaid from the protocol buyback vault, not from emissions.
Sustainability controls
- Buyback vault funded by protocol revenue and open-market buybacks.
- Deposit caps tied to available vault reserves and a target coverage ratio.
- New deposits throttle or pause automatically if liabilities approach predefined limits.
- Public dashboard: vault balance, cumulative DUST burned, outstanding liabilities, coverage ratio.
Why not just buyback-and-burn?
They’re complementary, not competing:
- Entry burns are user-funded — permanent supply reduction the treasury doesn’t pay for.
- Burns alone change nobody’s individual decision to sell. A lock pays individuals to take their DUST out of the float.
- Every deposit is liquid DUST leaving the market, with part of it destroyed forever.
Honest tradeoff: locked DUST re-liquifies at maturity — only the burn is permanent. That’s why maturities should be laddered and re-locks incentivized.
Open parameters
- Entry burn percentage
- Lock durations and boost multipliers
- Principal treatment at maturity: full deposit vs. net of burn
- Minimum coverage ratio before deposit throttling triggers
Core principle
As long as buyback inflows exceed the protocol’s future repayment obligations, the vault stays solvent while DUST becomes increasingly scarce over time.