XIP-10
Unemitted Supply Burn Mechanism
Summary
This XIP proposes a significant reduction in the total supply of XNET tokens to address concerns about future dilution and incentivize network development. This reduction will be achieved through a burn mechanism that will burn a portion of future emissions proportionally among the existing token pools.
The burn rate will start high and gradually decrease over time, ensuring a significant reduction in total supply while maintaining a sustainable emission schedule. This proposal aims to optimize XNET's tokenomics for long-term growth and stability.
Rationale
Before the move to Solana, XIP 3 was introduced and passed to address XNET’s irregular token supply overhang. The XNET community implemented a 90% supply reduction, which has helped, but did not completely solve the problem. It still has left XNET with a smaller circulating supply to total supply percentage compared to industry peers.
Circ. Tokens
64.12M
170.5M
576M
Total Tokens
2.4B
223M
2B
Float
2.67%
76.4%
28.8%
The original tokenomics envisioned a need for larger long-tail token distributions to incentivize development 10+ years in the future. This gave the appeal of flexible future emission concepts, but at the expense of long term dilution of the circulating supply. However, the fundamental DePIN flywheel is designed to drive rapid growth to reach network scale within a 5-10 year period, after which the fundamental emissions/burn model should stabilize. Therefore, a large unemitted supply is unnecessary, and in fact serves to undermine the initial bootstrapping phase of network development due to future dilution uncertainty.
The project does not need nearly as many tokens as were kept during the migration, so this XIP proposes a reduction in the total supply based on a multiple of emissions over the next 26 epochs. This burn will come purely from future emissions and can be split on a pro rata share across the emission pools.
Related XIPs
XIP-3: Reduce $XNET total supply XIP-7: Chain Migration/XNET Foundation
Proposal Details
Unemitted XNET Burn
The burn will be based on a multiple of the total emissions per epoch, starting in Epoch 50. At the end of each epoch, the total emissions towards coverage & validation, data, and bonuses will be multiplied by the future supply reduction factor. This factor will be very large (450x) to start in order to address the total supply within a short time, and then will reduce substantially once total supply drops below 1.0B (20x). The factor will remain at 20x until the end of Epoch 75 or at a floor supply of 850M, at which point the burn mechanism will be eliminated entirely.
Total Burn per Epoch, TB = (RCV+RD+RB) kFSR RCV = Coverage & Validation Rewards RD =Data Rewards RB =Bonus Rewards kFSR =Future Supply Reduction Factor
Based on the current emissions projections model, these are the expected cuts to total supply over the next 26 epochs Epoch End Date Epoch Number Tokens Emitted Future Supply Reduction Factor Future Supply Reduced Fully Diluted Supply
10/14/2024 Epoch 49 462,105 0.0x 0 2,400,000,000 10/28/2024 Epoch 50 462,105 450.0x (207,947,250) 2,192,052,750 450x until below 1.0B 11/11/2024 Epoch 51 503,323 450.0x (226,495,350) 1,965,557,400 11/25/2024 Epoch 52 503,323 450.0x (226,495,350) 1,739,062,050 12/9/2024 Epoch 53 549,319 450.0x (247,193,325) 1,491,868,725 12/23/2024 Epoch 54 549,319 450.0x (247,193,325) 1,244,675,400 1/6/2025 Epoch 55 545,645 450.0x (245,540,025) 999,135,375 1/20/2025 Epoch 56 545,645 20.0x (10,912,890) 988,222,485 20x until Epoch 75 or floor of 850M 2/3/2025 Epoch 57 594,964 20.0x (11,899,280) 976,323,205 2/17/2025 Epoch 58 594,964 20.0x (11,899,280) 964,423,925 3/3/2025 Epoch 59 650,055 20.0x (13,001,100) 951,422,825 3/17/2025 Epoch 60 650,055 20.0x (13,001,100) 938,421,725 3/31/2025 Epoch 61 650,055 20.0x (13,001,100) 925,420,625 4/14/2025 Epoch 62 711,703 20.0x (14,234,050) 911,186,575 4/28/2025 Epoch 63 711,703 20.0x (14,234,050) 896,952,525 5/12/2025 Epoch 64 780,804 20.0x (15,616,080) 881,336,445 5/26/2025 Epoch 65 780,804 20.0x (15,616,080) 865,720,365 6/9/2025 Epoch 66 858,388 18.3x (15,720,365) 850,000,000 6/23/2025 Epoch 67 858,388 0.0x 0 850,000,000 7/7/2025 Epoch 68 881,915 0.0x 0 850,000,000 7/21/2025 Epoch 69 881,915 0.0x 0 850,000,000 8/4/2025 Epoch 70 970,613 0.0x 0 850,000,000 8/18/2025 Epoch 71 970,613 0.0x 0 850,000,000 9/1/2025 Epoch 72 1,070,436 0.0x 0 850,000,000 9/15/2025 Epoch 73 1,070,436 0.0x 0 850,000,000 9/29/2025 Epoch 74 1,070,436 0.0x 0 850,000,000 10/13/2025 Epoch 75 1,182,945 0.0x 0 850,000,000
Projected Burn By Pool
Epoch Number Total Supply Burn Operator Pool Burn Foundation Pool Burn Investor Pool Burn Insider Pool Burn Ecosystem Pool Burn Fully Diluted Supply
Epoch 50 (207,947,250) (103,324,331) (43,442,057) (13,679,465) (15,503,393) (31,998,004) 2,192,052,750 Epoch 51 (226,495,350) (112,540,467) (47,316,923) (14,899,620) (16,886,237) (34,852,103) 1,965,557,400 Epoch 52 (226,495,350) (112,540,467) (47,316,923) (14,899,620) (16,886,237) (34,852,103) 1,739,062,050 Epoch 53 (247,193,325) (122,824,827) (51,640,917) (16,261,202) (18,429,363) (38,037,016) 1,491,868,725 Epoch 54 (247,193,325) (122,824,827) (51,640,917) (16,261,202) (18,429,363) (38,037,016) 1,244,675,400 Epoch 55 (245,540,025) (122,003,339) (51,295,527) (16,152,443) (18,306,102) (37,782,614) 999,135,375 Epoch 56 (10,912,890) (5,422,371) (2,279,801) (717,886) (813,605) (1,679,227) 988,222,485 Epoch 57 (11,899,280) (5,912,486) (2,485,867) (782,774) (887,144) (1,831,009) 976,323,205 Epoch 58 (11,899,280) (5,912,486) (2,485,867) (782,774) (887,144) (1,831,009) 964,423,925 Epoch 59 (13,001,100) (6,459,955) (2,716,047) (855,256) (969,290) (2,000,552) 951,422,825 Epoch 60 (13,001,100) (6,459,955) (2,716,047) (855,256) (969,290) (2,000,552) 938,421,725 Epoch 61 (13,001,100) (6,459,955) (2,716,047) (855,256) (969,290) (2,000,552) 925,420,625 Epoch 62 (14,234,050) (7,072,581) (2,973,622) (936,363) (1,061,212) (2,190,273) 911,186,575 Epoch 63 (14,234,050) (7,072,581) (2,973,622) (936,363) (1,061,212) (2,190,273) 896,952,525 Epoch 64 (15,616,080) (7,759,280) (3,262,340) (1,027,278) (1,164,248) (2,402,933) 881,336,445 Epoch 65 (15,616,080) (7,759,280) (3,262,340) (1,027,278) (1,164,248) (2,402,933) 865,720,365 Epoch 66 (15,720,365) (7,811,097) (3,284,126) (1,034,138) (1,172,023) (2,418,980) 850,000,000 Epoch 67 0 0 0 0 0 0 850,000,000 Epoch 68 0 0 0 0 0 0 850,000,000
Total (1,550,000,000) (770,160,287) (323,808,989) (101,964,176) (115,559,400) (238,507,149) 850,000,000 Unallocated Tokens Available 1,824,170,088 906,389,263 381,085,595 120,000,000 136,000,000 280,695,230
Percentage Available 49.69% 20.89% 6.58% 7.46% 15.39%
Maximum Burn Cap
The total burn will be capped to not reduce the supply below 850M XNET. This burn is independent of the data buy/burn, so the total supply can continue to reduce based on the future buy/burn mechanism. For example, if the actual emissions exceed the projected emissions, and the total burn amount from this proposal would drop the total supply below 850M XNET, the supply reduction factor would be changed so that the total supply drops to exactly 850M XNET. Also, the supply reduction factor would be set to 0 for all Epochs following this occurrence.
Impact Assessment
The XIP was modeled based on the XNET Foundation’s emissions projections. The impact to total supply is projected to be a reduction from 2.4B XNET to 850M XNET over a 1 year period. The impact to the community will be a lower impact of long term dilution of the token supply.
Burn Process
Process for using the Sol Incinerator to burn an SPL fungible token. https://sol-incinerator.com/ Sol Incinerator is a dApp on the Solana blockchain that allows anyone to permanently remove tokens from circulation, also known as “burning.”
At the completion of each Epoch and after rewards distribution the token amounts will be pulled from each pool by the XNET Foundation and sent to the designated “Burn” wallet. (Wallet will be created and address publicly available for transparency as well as TXs for completed burns) • Connect wallet to Sol Incinerator to initiate token burning. • Select $XNET SPL Token 2022 • Confirm the burn transaction • After each burn, monitor https://solscan.io/ to verify the new total supply. • Announce burn events to the XNET community • Share updates on X and other platforms, detailing the amount burned each Epoch
Voting Options
Community members can choose the following options on Align: Support 👍🏼 or Against 👎🏼
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