Floki Inu Developers Float DAO Proposal to Burn $55M of Its Own Tokens

The proposal is part of a broader move towards positioning Floki Inu as a serious DeFi project, developers told CoinDesk.

AccessTimeIconJan 27, 2023 at 9:24 a.m. UTC
Updated Mar 10, 2023 at 3:48 p.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

Developers behind Floki Inu, the Shiba Inu dog breed-themed project, have floated a governance proposal to burn nearly $55 million of its namesake FLOKI tokens and reduce a tax levied on each transaction.

Burning tokens is a way of reducing supply, which subsequently adds value to each token as long as the level of demand remains the same. The Floki team hopes to position the project as serious decentralized finance (DeFi) contender. “Floki's latest DAO vote makes it clear that Floki is more than just a meme coin,” B, a Floki core team member told CoinDesk, referring to a decentralized autonomous organization.

“Floki has demonstrated a strong focus on utility and fundamentals: through the mainnet release of our FlokiFi Locker protocol and the first major testnet release of our metaverse game Valhalla in a bear market,” the core team member added.

The proposal also pointed out security risks associated with bridges as another rationale. Last year alone saw over $2 billion lost or stolen from cross-chain bridges, as CoinDesk reported.

“More exploits and data have emerged to show how much of a threat cross-chain bridges could pose, especially if they hold a significant amount of a token’s supply,” the proposal stated.

“In Floki’s case, an exploit on our main cross-chain bridge would have a catastrophic impact on the project since this bridge currently holds 55.7% of what FLOKI’s total circulating supply should be. This is a lot of tokens, and that’s more than enough to drain the project’s liquidity pools and essentially destroy the project if exploited,” they added.

If this proposal passes, some 4.97 trillion FLOKI tokens in the Floki bridge will be burnt while the self-imposed buy and sell tax on each transaction would be reduced to 0.3%. The bridge would also be permanently disabled.

At writing time on Friday, an overwhelming 99% of all voters were in support of the newly floated proposal, the governance forum shows.

Bridges refer to a blockchain-based tool that allows users to transfer tokens between different networks.

The Floki bridge

Floki initially issued its token on Ethereum with a total supply of 10 trillion tokens before eventually expanding to the faster and cheaper BNB Chain in 2021, after community requests.

The team had to launch another contract on the BNB Chain with its own total supply of 10 trillion tokens. However, this required a cross-chain bridge to ensure the FLOKI total circulating supply at any given time never exceed a total supply of 10 trillion tokens and to allow for users to transfer their FLOKI from Ethereum to BNB Chain and vice versa.

At the time, the team used 600 billion tokens from its treasury on Ethereum and BNB Chain to provide the initial funds for the bridge.

Since then, most holders locked their FLOKI tokens on Ethereum and transferred those out on BNB Chain. “As a result of this, while the majority of the supply is still on the [Ethereum] chain there is now such a balance that the absence of a bridge would not threaten the stability of project,” developers wrote in the proposal.

FLOKI remained nominally changed over the past 24 hours, data from CoinGecko show. The tokens have appreciated 6% in the past week.

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Shaurya Malwa

Shaurya is the Deputy Managing Editor for the Data & Tokens team, focusing on decentralized finance, markets, on-chain data, and governance across all major and minor blockchains.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about