Fantom to Use Part of Its Burn Fees to Fund Ecosystem Projects
- Most of the Fantom community members voted for the company to use about 33 percent of its burn fees to fund new projects.
The result of a governance vote on a proposal requesting that Fantom uses one-third of its burn fees to fund new Fantom-built projects is out. Almost 100 percent of the voters voted in favor of the proposal.
Voting on the proposal started on July 5, 2022. However, it had to be closed earlier than the scheduled October 3 after votes in favor of the proposal surpassed the required 50 percent mark, according to the proposal.
Fantom Takes Extra Measures to Survive the Bear Market
The results showed that 99.75 percent of the community members favored the proposal. Currently, Fantom burns 30 percent of all tokens it receives as network fees. The burning mechanism involves permanently removing a certain amount of tokens from circulation.
This process usually reduces a token’s total supply but enhances its worth since less of it is now available in circulation. Following the community’s approval, Fantom will send over 33 percent of 30 percent in network fees to the Special Fee Contract (SFC) for onward distribution to the ‘ecosystem support vault.’
Fantom’s network validators and stakers control the SFC through community proposals and on-chain governance. Burning the remainder of the token network fees would take place like before. Consequently, there is less fee burn in the amount of FTM destroyed annually.
Any project proposals which the ecosystem vault approves will receive their payments manually from the Fantom foundation. The foundation will use Llamapay or similar tools to disburse such payments. However, developers want community members to include vest periods for these payments.
Thus, project founders can have the right motivation to keep working. If they receive all the payments immediately and they lose interest in the project along the way, the funds will be a waste.
Risks and Solutions
There are three primary risks stated in the newly-approved proposal. Approving projects that maliciously request funds from the ecosystem vault, influential groups, persons promoting projects they control, or funding such projects themselves. Lastly, a project that fails to deliver on its promises, let alone its over promises.
However, Fantom has put in place some measures to fight these risks. The network has the right to stop any payment stream for specified reasons permanently. Such reasons include but are not limited to suspected fraudulent user activity or a project that poses possible risks to the Fantom ecosystem.
Now that the Fantom community has approved the proposal, projects that need grants can apply for funding. Project founders can submit the proposals for the applications through the Fantom governance portal. Then, the community would decide whether to fund such a project via vote.
It seems that the approval of the proposal is starting to affect Fantom’s native token (FTM). FTM currently trades at $0.303. It has gained 2.82 percent over the past 24 hours. Fantom is a smart contract platform offering developers decentralized finance (DeFi) services through its unique consensus algorithm.
Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”
