# XIP-10

## 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.

|        Value | XNET   | Helium | World Mobile |
| -----------: | ------ | ------ | ------------ |
| 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 👎🏼`
