Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
Besides the deflationary approach to increase the value of KLAY, the protocol also revealed that it is committed to increasing the utility of the digital currency beyond its use as a gas fee.
The Klaytn Foundation, the blockchain startup in charge of maintaining the Klaytn Blockchain’s code, has proposed cutting the total supply of the KLAY token by 50%. According to a Coindesk report, the demands were contained in a tokenization optimization proposal that will impact the core outlook of the protocol.
The proposal is up for voting by the Governance Council of the Klaytn protocol in an event that will span from February 22nd to February 28. Should the proposal be passed, as many as 5.28 billion KLAY units will be burnt. This amounts to 73% of the reserve supply and about 48% of the total KLAY supply.
The Klaytn Blockchain came into the limelight back in June 2019 through the developmental efforts of GroundX. It was designed as a public blockchain focused on the metaverse, gamefi, and the creator economy. Owing to the affiliations of GroundX to Korea’s largest mobile platform Kakao, the protocol recorded immense popularity at the time.
The protocol was launched with plans for a total token supply of over 11 billion KLAY units. Since its inception, just about 3.1 billion tokens have been circulated thus far. With the new proposal from the Klaytn Foundation, the initial minting reserve of 7.48 billion tokens will be reduced to 2.2 billion after the burn-off.
The 200 million atop the remaining supply has been designated as a reward for GroundX. This will serve as payment for work targeted at infrastructure development, network operation, and management services.
The 2 billion tokens remaining will now form the ‘KLAY Value Creation Reserve’ and will only be deployed to initiatives that can foster the deflationary push of the protocol.
Long-Term Value of the Klaytn Foundation Burn Proposal
Turning a digital currency asset into a deflationary one is considered a bullish move that is billed to foster the future value accumulation of the coin. The same sentiment holds true for KLAY.
“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.
Besides the deflationary approach to increase the value of KLAY, the protocol also revealed that it is committed to increasing the utility of the digital currency beyond its use as a gas fee. Among the options being explored include the introduction of Oracles. In addition, the Klaytn Foundation said it is courting new partnerships in the broader ecosystem that can help bolster the protocol.
The KLAY token is currently changing hands at $0.3141, up 0.86% over the past 24 hours at the time of writing. The coin is down by more than 92% from its All-Time High (ATH) price of $4.38.