I think burning is more of an optics thing – the ability to increase the % of burned tokens each week without needing the protocol to buy them off spot. Instead that protocol revenue can be directed to holders.
So this decision basically has zero impact on anything then ? (since we are talking about burning tokens which were not in circulation to start with…) It’s not like we are competing with these tokens for a share of revenues. Or that burning them will put any buy pressure on DUST…
Is it just for bragging rights then ? (like you say, maybe the ability to claim a higher % of burned tokens…)
Yeah, like @argsarausrex said, it’s just for the optics. It’ll feel good to see 42,069 dust burned each week. It’s a psychological win.
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Right. Except that we won’t see that 42,069 because it will added to the existing burn numbers of the week… so we’ll have a random ‘63,012 DUST burn’ this week.
Really not sure who we are doing this for (if that’s the metrics you are looking at in order to decide whether to invest in neverland or not, you might be missing the big picture…)
Why spend any time or energy on figuring out whether we want a smart contract to do it? (we have to write the code + audit it… this is time + money we don’t have to spent, or that we could spend on real buybacks…) Why not just burn it all in one shot, be done with it and move on…
I imagine they would skip the contract. Alice will probably just configure a Catalyst automation: have him do it manually for 52 weeks in a row.
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Indeed. And on the plus side, every week we have one more chance to try to bribe Catalyst to send a small % of this 42,069 DUSTs to our wallets. I like my odds here.
But then again, if we burn it all in one shot this whole problem goes away…
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If we fast forward a couple of years, scheduled emissions will have ended, but we will still have tens of millions of dust sitting in various buckets. This is the first of many votes we will likely have about what to do with all that extra dust post-emissions.
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Humbly suggesting minimalist burning please and as part broader tokenomics.
Several have referred to Jupiter, but the burning did not really have a positive effect when discussions are dominated by price being a reflection of value. A lot on Jupiter are actually not happy about the team’s utilization of $JUP, and look at the price now after the great burning in Istanbul? Burning on other projects really didn’t have impact except on the marketing side.
Deflationary mechanism could be integrated in many or all Neverland app. functions that make it a core part of Neverlands circulatory system. Like every borrow or pay would involve buying and burning $DUST. This will also increase $DUST visibility on Monad’s blockchain stats.
Also improving rewards mechanism in a forward looking program that would entice users of every level in world to join in try Monad and try Neverland and how it benefits personal finance (not just big users). Right now there are still very few users and just starting, but there is immense opportunity utilizing this in bringing more users in.
Yes, this is the idea. This is long-term thinking. While this may not have a “today” impact, we can start looking towards the future and what we would like to do with DUST that did not follow its intended schedule for release, for example DUST that was allocated for Investors but then never actually closed on. At that point in time, we could still have a large total supply, not in circulation, leaving much to speculation about DUST’s value. We don’t have to decide everything today, but we can start looking at these unutilized tokens and decide if we want to reduce the supply proactively, or leave the plans vague for another couple of years.
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Trust me. Having @Catalyst sending tokens to your wallet at regular intervals is not a nice as it sounds…
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This proposal is quite interesting. Essentially, it’s similar to the share repurchase and cancellation programs used in the stock market. The difference is that these shares aren’t tradable. This approach will ensure that each shareholder (including me) receives a greater dividend each week.
It’s important to understand that if these tokens are not destroyed, the team can only allow them to flow into the market, which would be even more detrimental for us.
Some clarifications about this. These “shares” are earmarked to be sold to investors, they are not currently counted in the circulating supply and do not result in more revenue share or “dividend” each week if burned.
This does not change circulating supply, or mcap or anything. Totally understand there is no use for it, so burning makes sense. No real upside, but could become a downside if they stay available for too long.
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While reducing supply through token burns may provide short-term positive sentiment, the long-term success of Neverland depends on increasing demand for DUST rather than simply decreasing its supply. I’m not sure how much of a short-term positive effect that will be achieved through a year-long burn.
I think that future governance efforts focus on making DUST an essential asset within the Monad ecosystem. Is it really necessary to permanently burn so much DUST when Monad hasn’t even been around for a year?
I think the team has already thought about a lot more things than I have.
How about enhanced benefits for veDUST holders, such as reduced borrowing costs, higher capital efficiency, and priority access to new protocol features?
Strategic partnerships that provide ecosystem rewards or whitelist spots to veDUST holders.
A protocol revenue buyback mechanism that continuously acquires DUST from the market, creating sustainable demand tied directly to protocol growth.
The strongest token economies are built not on scarcity alone, but on utility and demand. As Neverland grows, our objective should be to create more reasons to own and lock DUST, making it a core asset of the Monad ecosystem.
A lot of what you mentioned are already in place such as strategic partnerships with various NFT collections, token buybacks, and access to new features. And this is on top of a weekly revenue share in USDC. AND we are launching even more utility and features for the token soon too.
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I see. Looking forward to seeing new utility.
One thing I’m curious about is why DUST ended up with such a large unused allocation in the first place. Was the possibility of a future burn anticipated when the tokenomics were originally designed? Or is this simply a result of lower-than-expected demand for DUST and/or slower-than-expected growth of the Monad ecosystem?
Personally, I am somewhat hesitant about permanently burning tokens. While it may improve scarcity in the short term, it also permanently reduces the protocol’s strategic resources.
When designing the tokenomics for DUST before Neverland’s launch, we planned to do a larger raise for the protocol to secure a large runway, be heavily bootstrapped and set up for success. We started off with one angel investment and then began speaking with VCs. We received an offer for a $10M commitment, but the terms would not have been favorable and would have undermined the flywheel we have created to support DUST and bring it value. We turned down this offer, and another VC offer more recently due to unfavorable terms.
The team decided we would rather build Neverland on the slower but more sustainable path than accept the large raise offers we have received if the terms were not favorable or had high potential for damage to our system. This means we have been left many more DUST that still has not been committed as intended. We still could, if the right opportunity came along, but this proposal seeks to deal with just a portion of that overhang.
Users do not like the uncertainty around “when” more tokens will enter circulation, what the effects to DUST value will be. We can put these conversations off and continue to leave things unclear, or we can begin now to discuss and plan what we would like to do with tokens such as these that have gone unallocated - and over time, we can resolve a plan for the rest.
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I see, that makes a lot of sense.
I agree that it is probably not ideal for this uncertainty to persist, especially when it is unclear how such a large unused allocation could affect the future value of DUST.
I fully support the Neverland team’s decisions, but I do have one question. If a significant amount of DUST is permanently burned as proposed, could we eventually find ourselves in a situation where there is not enough DUST available to accommodate an attractive strategic offer from a VC or institutional partner in the future?
Would a time-locked approach be a viable alternative to permanent burning?
For example, instead of burning 42,069 DUST per week for 52 weeks, those tokens could be locked for a fixed period. If the protocol continued locking 42,069 DUST every week for 52 weeks, then starting in week 53 the amount being unlocked each week would effectively match the amount being newly locked.
This would provide flexibility. If additional DUST is needed in the future, the protocol could simply stop creating new locks and gradually increase the circulating supply through scheduled unlocks. If market conditions remain healthy, the locking program could continue. Alternatively, if reducing supply is still considered desirable, the unlocked DUST could then be burned gradually over time.
I may be underestimating how quickly things move in this industry, but from my perspective, a lock-based approach seems to preserve future optionality while still addressing concerns about excess supply.
These tokens are simply earmarked for investors. If we choose not to use them, we can simply not use them at all. The main point here is that as a holder, do you prefer to have certainty that these tokens are removed from the supply permanently, or do you prefer a future where there is a chance that these tokens are used and enter the circulating supply (thus, diluting everyone).
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I agree with the general direction of the RFC. The following is important in my opinion:
Vany is right, but I think signal matters too. A small portion of users are following Discord to read my walls of text every time I’m debating topics like “What happens when incentives end?” or “What happens when 100M tokens are locked?”
The reality is that 100M tokens will never be locked, not 90M, not 80M, maybe not even 70M or 60M. Today’s ecosystem incentives pool has 40M tokens. Maybe marketing will contribute heavily to increase the supply to 50M, or go the extra length with team allocations eventually being used and reach 60M.
Neverland’s goal after the initial 6 months of operations is to start drifting away from using the token as an incentive and generate revenue and usage end to end. Ecosystems die when their incentives end, and this happens every single time unless there is a service that is as meaningful as the incentives. Then the incentives can be used as a nice boost… as an incentive, not a farming mechanism.
I believe it’s safe to assume today that, from this specific allocation, we wouldn’t want to reintroduce any tokens. If Neverland needs to raise toward a goal, the remaining amount is still enough even if this proposal passes.
TL;DR: @vany365 is absolutely right, but the signal is important too. Burning ~35% of an allocation that you might not need at all is a good tradeoff, a middle ground that sends a strong signal, as @polka_paca and @jackfarrington mentioned earlier, while not wiping out an allocation for next to no direct impact on anything other than optics for the uninitiated who do not understand what this 100M supply actually breaks down to.
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