Fantom has released a decentralized vaults product to fund projects and applications that are building on its blockchain, developers said Friday.
Called Ecosystem Vault, the project is an on-chain fund financed by 10% of the transaction fees on Fantom and controlled by the community. The initiative was made possible by decreasing the burn rate of FTM and redirecting the resulting 10% to the vault.
CoinDesk previously reported on Fantom’s community governance decision to fund ecosystem projects using a portion of the fees.
“The Vault represents a valuable opportunity for projects to secure funding in their efforts to build innovative dApps on Fantom,” developers said. “It’s also a chance for the Fantom community to come together and shape the future of the platform through their funding decisions.”
Token burning means removing coins from the overall supply of a cryptocurrency by sending those tokens to a wallet that can only receive them.
Any proposal must receive at least 55% approval from the community to be funded, with at least 55% of FTM stakers in attendance. For the initial launch of the Vault, there will be only five projects receiving payments at any one time.
Payments will initially be executed manually via the Fantom Foundation, using tools such as LlamaPay, to fund projects whose proposals are approved by the Ecosystem Vault.
Developers say community members must add vesting periods to the payments to ensure project founders are incentivized to work continuously, instead of receiving the payments all at once and possibly losing interest.
Risks outlined by the now-passed proposal include malicious approvals of projects requesting funds from the Ecosystem Vault, influential entities or groups funding themselves or promoting projects they control and a project that overpromises and cannot deliver with the received funds.
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