Hi Team, I would like to propose enabling the token burning mechanism. Casper Network
What would be the procedure to enable voting?
Regars
Hi @Markov,
Thank you for your proposal.
To initiate a formal vote on a network-wide change like enabling a token burning mechanism, you’ll need the support of at least one active validator on the Casper Network. This validator would need to submit the proposal through the proper governance channels (typically a CEP – Casper Enhancement Proposal – and/or through an on-chain vote if applicable).
The recommend way would be following these steps:
- Refine your proposal: Clearly outline the motivation, technical details, and potential impact of the burning mechanism.
- Engage with validators: Reach out to validators who may be aligned with your vision and discuss your proposal with them.
- Submit a formal proposal: With validator support, your proposal can be submitted to the appropriate governance process for community review and voting.
Let me know if you need help connecting with validators or preparing a more detailed draft.
Best,
Muhammet
Hi @kara! Please to meet you!
I really dont know what types of parameters would be enabled when activating the burning mecanism, or if they can be modified to match our needs. But here i left my proposal, and i hope the community contributes with their ideas.
Please if you can conect me with validators to hear their opinion on this case, i will be grateful.
Regards
1. Summary
Proposes a Dual-Path Burn mechanism to:
- Reduce CSPR inflation from 15% to 5-7%
- Maintain ≥90% of validator rewards
- Create deflationary pressure during low network usage
- Enhance token scarcity while preserving network security
2. Problem Statement
- Current annual inflation: 15%
- High dilution threatens token utility and holder value
- Urgent need to balance inflation control with validator incentives
- Critical requirement: Validator rewards must remain economically viable
3. Proposed Solution: Dual-Path Burn (DPB) - Adjusted for 15% Inflation
Component 1: Enhanced Transaction Fee Burn
------------------------------------------
Mechanism: Burn 60-80% of all gas fees
Parameters:
- Base burn rate: 70%
- Adjustable via governance
Additional: Distribute remaining 20-40% to validators
Component 2: Aggressive Dynamic Block Reward Burn
-------------------------------------------------
Mechanism: Burn = B × (1 - Utilization)^1.5
Parameters:
- B = 35-45% max burn rate
- Utilization = Actual TPS / Max TPS
- Exponential factor increases burn during low usage
4. Economic Impact Analysis
- Inflation reduction: 15% → 5-7%
- Validator reward impact:
* 100% base block rewards preserved
* 20-40% of fee rewards maintained
* Net reward reduction: 8-12% offset by token appreciation
- Supply impact: +15% annual growth → +4-6%
5. Implementation Roadmap
Phase 1: Testnet Deployment
- Simulate current 15% inflation baseline
- Model burn scenarios with 70% fee burn + 40% max block burn
- Stress-test validator economics
Phase 2: Governance Vote
- Stakeholder voting on parameters:
* Fee burn percentage (60-80%)
* Constant B (35-45%)
* Utilization sensitivity factor
Phase 3: Mainnet Activation
- Protocol upgrade implementation
- Real-time inflation dashboard with burn metrics
6. Validator Impact Assessment
- Reward protection mechanisms:
* Full block rewards maintained (critical for 15% baseline)
* Minimum 20% fee reward guarantee
* Value appreciation from reduced inflation offsets 60% of reward reduction
- Security preservation:
* Staking APR remains >12% after adjustments
* Enhanced token scarcity improves reward value
7. Risk Mitigation for High Inflation Environment
- Validator compensation fund:
* 5% of burned fees allocated to temporary reward buffer
- Emergency governance override:
* Allow temporary burn reduction if validator participation drops below 90%
- Phased activation:
* Start with 50% fee burn, increase 5% monthly to target
8. Conclusion
The enhanced DPB mechanism addresses CSPR's critical 15% inflation by:
- Implementing aggressive but controlled burns
- Preserving validator economics through reward safeguards
- Creating supply reduction momentum
- Establishing CSPR as sustainable proof-of-stake network
Thanks a lot for taking the time to draft your proposal!
I’ll notify the validators about the topic so that they can engage. In the mean time, you may want to revise the proposal based on the notes below:
- Casper’s inflation rate is not 15%, but 8%. APY you see on CSPR.live is result of partial staking of the total supply. For example, if 50% of the tokens are staked, the stakers will get the 8% emission distributed to them as rewards, resulting in a 16% APY due to half of the token owners not getting the rewards.
- There is a new mechanism which came with Casper 2.0, but not yet enabled, regarding gas fees. And there are more changes on the way, for the upcoming upgrades. Please see: Casper v2.0 Release Notes | Casper Docs
- As a validator, speaking only on my behalf, I would be totally okay to even burn 100% of tx fees at this moment.
Hi Kara!
Thank you very much for the clarification. I wasn’t taking into account that the APY corresponds to the percentage of tokens staked. Here i left the updated proposal:
Proposal to Enable 100% Transaction Fee Burning on Casper Network
1. Executive Summary
This proposal recommends implementing permanent burning of all transaction fees on Casper Network. Key benefits:
Creates deflationary pressure on CSPR supply
Increases token scarcity over time
Maintains validator earnings through block rewards
Aligns with successful models like Ethereum and BNB Chain
2. Technical Implementation
2.1 Core Changes:
Modify chainspec to burn 100% of transaction fees:
Current setting: fee_handling = { type = 'no_fee' }
Proposed setting: fee_handling = { type = 'burn' }
Add burn_address = '0x00...dead'
2.2 Monitoring:
Add burn tracking
Track burned fees in block headers
Display in network explorers
3. Economic Impact
Same total earnings (via block/signature rewards)
Potential CSPR value appreciation benefits all
4 Deployment:
Testnet: 8 weeks post-approval
Mainnet: Era X+100
Monitoring: 6 months
5. Risk Mitigation
Risk Solution
Validator concerns Show equivalent earnings
Spam attacks Keep minimum fees
Volatility Gradual implementation
Explorer issues Pre-launch coordination
6. Ecosystem Benefits
Token value growth
Simplified economics
Competitive advantage for:
DeFi applications
Financial dApps
Long-term holders
7. Conclusion
Fee burning creates sustainable tokenomics by:
Reducing supply permanently
Maintaining validator incentives
Following proven industry models