Should Defrost Finance do a burn? If so, how much?

Hello fellow Defrosters,

I think many investors have already raised this issue in Defrost’s social channels - should we have a burn to reduce the supply of tokens?

Let’s get the discussion going!

A token burn theoretically would increase the value of each token. Say we burn 50% of the tokens then prices should increase by a factor of 2x for fully diluted mkt cap to remain the same.

How do other tokens fare in relation to burning mechanics? Say if a 25% burn of the supply increases price by 2x or more than that would be very beneficial for current holders.

Given how reflexive crypto mkts are rising prices attract attention to the protocol. The positive momentum and vibes from chart going up could be used to attract more users so as to increase TVL in defrost.

I’m not opposed to a token burn as long as we use the opportunity to encourage users to use the protocol, mint H2O and learn how the platform works.

If we do decide to go ahead with a token burn then how much of a burn would be reasonable and what would be the marketing plan? I think if we decide on a map beforehand and coordinate efforts better we could achieve better more sustainable results.

Burning from a non-circulating supply is an empty gesture. There is no value added in burning something that never had value and was never on the market. However, it might be worth a discussion whether to use part of the H2O fees to buyback and burn MELT. Currently, 50% of the fees go to SMELT stakers and 50% is held for “other occasions” like currently supporting one of the LPs. Maybe we can have 50% to SMELT stakers, 25% buyback and burn of MELT and 25% for “other occasions”. Or maybe not buyback and burn but buyback and add liquidity. Certainly up to discussion but blind burn out of non-circulating makes no sense. MELT is not a dogcoin.

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Agree that a blind burn makes no sense.

burn $melt everytime h20 is minted?

Right now, the needs of Supervault cause the H2O to drop below the 1 USD peg.
How about using MELT as the gas, or ticket to join in the supervault.

It will be like collecting some fees.
And the MELT collected will be burnt.

Everybody wins.

It will be a good way to burn MELT.