Proposal for Implementing a Deflationary Mechanism for KTON

[sonoferin2000]

A Flexible Deflationary Model for KTON – Empowering Holders, Boosting Staking Rewards, and Strengthening the DAO

Objective:
Let’s introduce a gradual deflationary model for KTON that benefits everyone—from holders to the DAO itself. The goal is simple: create a steady revenue stream, reward those who stake, and build a treasury reserve that can be tapped for future liquidity. This proposal is all about flexibility and community choice, bringing a sustainable, deflationary approach that can evolve over time.

Key Proposal Elements:
Deflationary Transaction Fee (Up to 1%—Community Decides the Final Rate)
A small transaction fee would apply whenever KTON changes hands, excluding transfers between liquidity providers or smart contracts. Recommended Rate: We’re suggesting a 1% max as a starting point, but the exact rate is completely open to community feedback to keep trading healthy.

Distribution of the Fee:
Here’s how I'm thinking the fee could be split:
Burn Mechanism: Half of each fee would go toward a burn, gradually reducing the total KTON supply.
DAO Contribution: The remaining half could be:
Sent to the KTON DAO treasury, or
Split, with part going to the treasury and part to a rewards pool for stakers, or
Another distribution the community feels works best.
Note: All numbers here are just examples—I'm looking to fine-tune everything with your input.

Positive Impact on KTON Token Value:
Supply Reduction and Value Growth: As KTON gets burned with each transaction, the overall supply shrinks. Over time, this scarcity can drive up
the token’s value as demand grows or holds steady.
Incentives for Long-Term Holding: With a portion of fees going back to stakers, there’s a built-in reward for those who choose to hold and support the ecosystem.
Boosting Demand for Staking: Redistributing part of the fee to stakers creates ongoing rewards, drawing more holders to stake and contributing to a more stable token price.
Enhanced Liquidity and Stability: A gradually growing DAO treasury supports liquidity, making the whole ecosystem more resilient.

Community-Driven Adjustments:
All suggested numbers—fee rates, distributions—are flexible and open to community input. We want this fee to feel beneficial, not like a burden.

An Alternative to Buybacks:
This deflationary model is a resource-light approach compared to traditional buybacks. By building up the DAO treasury over time, the DAO can influence market stability and liquidity without needing to rely on big buybacks.

Conclusion:
In short, this proposal aims to set up a deflationary model that rewards KTON holders and grows the DAO’s self-sustaining revenue. By encouraging long-term staking and reducing the circulating supply, it lays the foundation for gradual value growth, liquidity, and community governance.

Community Discussion:
KTON holders are invited to share thoughts, suggest tweaks, and help shape this proposal. All the figures here are just examples, meant to kickstart the conversation. Let’s work together to align this model with our shared vision for the DAO’s future.

[sonoferin2000]

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