Proposal to Implement a Buyback and Burn Mechanism Utilizing Consumer Chain Fees

• Summary This proposal aims to introduce a buyback and burn mechanism for ATOM utilizing consumer chain fees. Instead of dispersing consumer chain fees directly to staker wallets, the collected fees will be used to purchase ATOM tokens from the open market, which will then be permanently burned. • Motivation The current model in which consumer chains fees are paid to the Cosmos Hub and dispersed to staker wallets, while effective, could be enhanced to create more value for ATOM holders and create renewed faith in the Hub’s chosen path forward. • Proposed Change This proposal suggests that instead of distributing consumer chain fees to staker wallets, these fees will be used to purchase ATOM on the open market, which will then be permanently burned. Key Elements of the Proposed Model: Consumer Chain Fees Collection: Consumer chains will continue paying fees to the Cosmos Hub as they currently do. The more consumer chains there are, the greater the fees collected by the Cosmos Hub. ATOM Buyback: An automated conversion process will be put in place to convert these fees into ATOM using a decentralized exchange (DEX). This ensures the continuous purchase of…

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The infinite supply is an issue for long therm prosperity. I will support a burn mechanism.

I like the idea
But ATM I see a problem
With PSS, validators wont validate all consumer chains
This means that as a delegator you choose validators based on their consumer chain thinking that the rewards will be better than with other validators
What I mean is that if you burn all the fees (rewards) you will increase the value for all Atom holders and not specifically for those who delegated to the validators who earn those rewards
This doesn’t seem fair especially as choosing a validator with a lot of consumer chains represent more slashing risk than choosing a validator with few consumer chains

Cela ne semble pas juste mais cela eviterait une certaine centralisation du stake sur les validateurs qui securisent les consumer chains.

Il faudrait trouver un mecanisme hybride dans l’ideal qui permettrait de remunerer le stakers et de bruler de l’Atom, peut etre un deal a faire des lentree dans le PSS.

I honestly don’t think the community cares to receive rewards that are split between so many wallets. I’m confident the majority would prefer a burn proposal that will increase the value of ATOM and bring in more investors. You do bring up a good question of whether we should burn only the delegator portion of the fees or all of the fees though (including those that go to paying the validators). I’d like to hear some validators weigh-in. The fact is, the greater the burn, the more the hype, more new investors, and greater support we’ll get from the community.

Hello, GeneralCrypto.

GeneralCrypto:

instead of distributing consumer chain fees to staker wallets, these fees will be used to purchase ATOM on the open market

Who would be responsible for developing this automated conversion process? I would politely suggest another approach, perhaps utilizing a newly proposed pool from the likeminded “majority’s” funds to donate his/her/their own ATOM towards this burn mechanism, and stand clear from altering existing/working staking incentives.

GeneralCrypto:

could be enhanced to create more value for ATOM holders

Cosmonauts, collectively, should not support any effort that aims to bring value to idle “Holders,” and fully reward delegators/“Stakers” for respectfully helping ensure Cosmos Hub security.

I think it’s a very good idea to add a burn mechanism Having an unlimited supply without burn is dangerous Having a burn mechanism would imply that the supply could decrease if the protocol makes enough profits Ethereum might be an example to be followed Guinch_Roze : This does not seem fair but it would avoid a certain centralization of the stake on the validators who secure the consumer chains. Ideally, we would need to find a hybrid mechanism that would allow stakers to be remunerated and Atom to be burned, perhaps a deal to be made for entry into the PSS. (C’est vrai ) Yes PSS could result to a concentrated staking into top validators, may be a tax like it was proposed by @effortcapital can be used and burnt ? CHIPs signaling phase: Vote Power Tax CHIPs This signaling proposal and the research prior to it were funded by the AADAO. The initial post outlining the concept and purpose of a “Vote Power tax” can be found here . In the initial post, we also propose a dynamic community pool tax, which is outside of the scope of this signaling proposal. Author: EffortCapital | Blockworks Research Summary The Vote Power Tax is an economic…

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2 questions

1. Inflation needs to be reduced by half, otherwise burning will not have much effect

2. Burning atoms also creates selling pressure on other consumer chains.

i think it would be smart to take 10% of current stake revenue and use 5% for a buyback and 5% for burn. stakers would get a 10% haircut but the needs of the market cap and fast growing supply outweigh the whales. imo.

Right now the ics rewards are so abyssally small I wouldn’t mind 100% buyback & burn. Would clean dust while sustain atom. We could revert that one day if the rewards increase and inflation decrease.

这个提案很棒，这是道家的双赢思维，虽然Atom把自己放在了很低的位置（这点非常棒），聚拢了许多的优质项目，但是在让对方得到好处的同时，也要让自己获利，不然一味的付出，难以长久