Let’s burn some tokens.
Treasury (Armor.fi: MultiSig | 0x1f28ed9d4792a567dad779235c2b766ab84d8e33) currently has 573MM Armor tokens. Tokenomics page details these amounts:
- Payout development grants–120MM has been allocated for this, none disbursed so far.
- Education programs–60MM has been allocated for this, none disbursed so far.
- Future team members/partners–162MM has been allocated to this, around 30MM has been disbursed so far.
- Future DAO funding–175MM.
Given the state of the protocol and what we’re now planning for our future, I believe tokens can be safely taken from future DAO funding, future team members, and education/development. Each of those should be able to fairly easily be cut in half with no problems, which would lead to around 250MM burnable tokens. We can adjust where that comes from exactly but, in terms of a group sum, that seems like a safe number where we maintain plenty of funds for all of the above until profitability–even at current prices–and room to adjust where some of those go (such as different staking rewards).
We then need to decide whether we want to do it all at once, in tranches so we can continue to adjust as situations develop, through campaigns like our burnaways where we burn tokens for social media shares, etc. I’m sort of a fan of a lump sum because of the marketing potential of the big number.
Thoughts on ideal amounts and strategies?
I opt for the marketing that would come from a lump sump burn. Maybe over the next 3 months we burn sums of the total amount So it’s like a 3 month long marketing event
You could do a hybrid version, where its we have a large lump sum burn and then another social media event, for likes/retweets/follows. But up the burn amounts significantly so it ends up being a large lump sum?
Start with a big 100M burn to announce a social media burn event like 100k per follow/RT up to 100M tokens?
We did get close to 100 followers from the last burn event that just finished. I think we need to find some strong ways to pump our twitter follows up to increase our community reach.
This is pretty cool. As long as we’re not guaranteeing a certain amount burnt after the initial burn and rather just a limit that could be good incentive to retweet/follow and spread the news.
I think I like that more than the original suggestion. @BigSword ‘s would be cool to extend marketing too. Maybe Chris’ suggestion but with one last burnaway after with 50MM max for unrelated announcements?
What about doing a spilt where 50% gets burned and the other 50% goes to long time holders, or some other form of giving some to hodlers but also burning?
We have allocations for airdrops at the moment but the main reason behind burning is that user sentiment is that there are too many tokens being introduced into circulation, so we want to ease those worries by ensuring a large percent will never be introduced. We want to be very careful with how much is introduced into circulation, but the thread regarding vARMOR staking is essentially what you suggested (although with token allocations separate from what we would burn).
I like the idea of reducing the circulating supply especially if there’s no use for it.
The social campaigns were a nice touch but they’re nice only when they’re novel. I wouldn’t overdo it.
A big large burn (250M tokens) in one go is definitely something that the community will notice and I would think this is the best way to go about it. I would time this up with a blog post explaining the rational and publish a new refined token schedule.
That’s a fair point, especially having another one come so soon after the last two. A big burn + blog post might be best.
Like / RT might take time, now to increase the circulation 250MM burn at the moment gives good perspective of the tokenomics
ok, yep, agreed, I think just 250MM in one go will be the proposal.
Sounds good to me! Also for future ideas, a burn month or something could be quite a cool marketing idea. ‘Each day we will be burning 10k $ARMOR tokens’ or something similar.
250m burn is a great idea, burn equivalent amount of new tokens introduced into circylation each week. So that Armor will be deflationary.
I like the Social burns as a tool but not too often. I like the idea of a big burn to really grab attention.
Can we make Armor deflationary? Meaning a very common/generic event burns the tokens, like buying or selling?
We could do something like this with protocol profits but I think we should instead reward stakers with tokens. This technically gives the same benefit to the users as if the tokens were burnt but encourages staking/locking up tokens/voting.
I dont mind burning. But is there really no better way to use ARMOR tokens?
Instead of burning, I’d prefer them being used to do interesting stuff, attract more people to ARMOR, maybe incentivise behavior that is long-term profitable to the DAO (burning is… not, it’s just a one-time thing).
Related: good podcast episode about treasury management for DAOs featuring Hasu & other: #3: Everything you need to know about DeFi treasuries, with Hasu, MonetSupply, and Larry Sukernik - I Pledge Allegiance | Podcast on Spotify (“I pledge Allegiance Epsiode 3”, description: In this episode of I Pledge Allegiance, host Derek Hsue chats about DeFi Treasuries with Hasu, MonetSupply, and Larry Sukernik. Treasuries are a hot topic in crypto right now; they represent huge, largely unused pools of capital that can be productively deployed. We explore helpful mental models for treasuries, what projects should and shouldn’t be spending money on, and how projects should be positioning their treasuries going forward. )
So maybe find better uses than burning. Diversifying the treasury could also be a long-term target of these tokens, though I’d be against selling them at the current prices. Maybe just hold onto them for now, keep them as strategic reserve.
Good to see you here Johnny! And I’m glad we have a dissenting opinion on this topic to make us think more.
Definitely good points and I wonder if the decision here will be indicative of/influential to what our true mission is.
The way I see it is that Armor is a protocol singularly created to provide the best DeFi coverage possible. With this mission, the treasury is important to get us going, grow the community, take advantage of what the community has to offer, entice skilled members to the team, and maybe give some strategic funding to protocols that help us achieve our goals (for example, our bug bounty partnerships that lower the chance of hacks occurring). Burning, with these goals, will help to grow the community and make more people interested/comfortable in participating in governance, and we have many more tokens for all those other purposes before needing to use profit from the protocol for them.
What I believe some see as Armor’s ultimate goal is more of a security “powerhouse” (more like Yearn or Sushi than MakerDAO or Uniswap). In this situation, we will need all of the above benefits but will also want much larger treasuries to make large investments in new products/protocols, in which case it would likely be more beneficial not to burn anything.
I always prefer focus, think there’s a huge benefit to having a singular goal–especially when we’re not sacrificing much of anything in terms of the size of the protocol given that our market is the entirety of DeFi–and burning will help us to get there more quickly, but this is something definitely worth talking about and if people disagree of what the ultimate goal is maybe burning isn’t the best idea.
There are also more things we haven’t talked about such as using the 250M tokens as a pool that can be used to pay for RCA losses if a particular year is very bad, which could theoretically lead to free insurance with enough capital and enough interest.
I agree with Johnny that instead of burning tokens, we could use them for other effective means. I’ve seen a lot of projects, both in crypto and in the real world, that focus a lot of attention on the technical aspects, governance, etc. (which is vitally important), but did not last long because they didn’t prioritize their marketing efforts to get customers and supporters in the seats. We have a multi-million dollar yacht with tons of amenities, but it’s just sitting at the pier. I would highly recommend a robust marketing agenda that WILL drive social media numbers, customer presence, and community morale. Just my 3 pennies
A big part of the burn is specifically for marketing, do you think we should spend the tokens on other types of marketing? We have some allocated for airdrops for the same reason but it wouldn’t be good for markets at the moment to do anything like liquidate and do paid marketing or anything of the sort.
I agree that doing paid advertisements at the moment may not be a great idea because of liquidation, but I would recommend using the community to post YouTube videos with how-to videos, use case videos, etc. and incentivize those within the community that do.
Getting some heavy hitter YouTube Influencers (Chico Crypto, Lark Davis, Cryptosrus, CryptoLove, Ellio TradesCrypto) to do a one-on-one with you. Any content on these influencer sites will definitely boost Armor presence and put the project on the minds of the Crypto community because they are trusted sources. This could be done with very little capital, if any. Just need someone on the team to reach out to them and see what they say. Can’t hurt.
I do believe the frequent AMA’s will help too. I’m sure you and the team have contacts and resources of teams from other successful projects that have successful marketing that you can tap into. Business still has that stigma of “sometimes it’s not what you know, but who you know”. My 3 pennies