Executive Summary
This proposal aims to implement a system where all fees earned by the Blast Foundation Treasury (e.g., USDB/wETH rebasing fees, gas fees) are used for weekly buy back and burn of $BLAST tokens. This initiative is designed to enhance the value of $BLAST by reducing the total supply, providing a deflationary mechanism, and offering a competitive edge against ETH and USDB native yield.
Motivation
By utilizing a portion of the treasury’s earnings to buy back and burn $BLAST tokens, we can create a deflationary pressure that increases the token’s scarcity and value over time. This strategy incentivizes holding $BLAST, increases user retention, and makes the network more attractive. It aligns the interests of $BLAST holders with the long-term success of the ecosystem and encourages broader participation by providing a tangible utility to the $BLAST token.
Proposal Details
Current State
Currently, fees collected by the Blast Foundation Treasury are retained for various purposes, but there is no direct mechanism for reducing the total supply of $BLAST through buy backs and burns.
Proposed Change
Use a portion of the treasury’s earnings, such as USDB/wETH rebasing fees and gas fees, to conduct weekly buy backs and burns of $BLAST tokens.
Benefits
- Increased Incentive to Hold $BLAST: Regular buy backs and burns will reduce the total supply of $BLAST, increasing its value and incentivizing users to hold the token.
- Enhanced Ecosystem Engagement: The deflationary mechanism creates ongoing interest and engagement within the ecosystem.
- Alignment of Interests: Aligns the financial interests of $BLAST holders with the overall success of the Blast network by enhancing token value through scarcity.
- Utility and Competitive Edge: Provides a clear utility for holding $BLAST, making it more attractive compared to ETH and USDB native yield, and gives users a compelling reason to hold the coin.
Implementation
Technical Adjustments
- Smart Contract Development: Develop a smart contract mechanism to handle the buy back and burn process. This will require regular snapshots of treasury earnings and proportional execution of buy back and burn transactions.
- Treasury Allocation: Determine the percentage of fees to be used for weekly buy backs and burns while ensuring sufficient funds remain for the treasury’s operational needs.
Timeline
- Week 1: Develop and audit the smart contract for buy back and burn.
- Week 2: Implement the buy back and burn mechanism and begin weekly executions.
Prior Proposals
This is the initial submission of this BLIP.
True and Complete
By submitting this BLIP, I represent and warrant to the Progress Council and the Blast Foundation that all the information it contains is true and complete to the best of my knowledge.