Klaytn Foundation has proposed a tokenomics optimization plan to its Governance Council (GC) in a move to improve the sustainability and value of KLAY tokens.
The GC, a group of network participants that oversee the governance of the Klaytn network, will vote on the proposal from February 22nd to February 28th.
The proposal includes short-term tokenomics enhancements that involve the initial burning of 73% of the reserve supply, equivalent to 5.28 billion KLAY tokens, which represent approximately 48% of the current total KLAY supply.
This move is expected to boost transparency in information disclosures and modify the management structure of ecosystem resources.
Klaytn Foundation has burned over 75 million KLAY through strategic buybacks and the burning of gas fees to date, and approximately 3.073 billion KLAY is in circulation.
Out of the initial minting reserve of 7.48 billion KLAY, the Foundation plans to burn 5.28 billion KLAY that has remained unused in the last three years and eight months.
Almost 200 million KLAY, which has already been contracted to be paid to GroundX, the subsidiary that developed the Klaytn blockchain, for infrastructure development, network operation, and management services, will be transparently executed.
The remaining 2 billion KLAY will be designated as the ‘KLAY Value Creation Reserve,’ which will only be allocated towards use cases and scenarios that help facilitate deflationary KLAY tokenomics, creating long-term value for KLAY tokens.
The foundation aims to increase the utility of KLAY beyond transaction fees by securing infrastructure services, such as oracles, necessary for the ecosystem, as well as investing in high-growth potential projects critical for the Klaytn ecosystem. These investments will channel returns back to the ecosystem and leverage said returns to expand KLAY demand.