TON validators are set to vote on a proposal that could adjust the supply of Toncoin by freezing 1 billion tokens for the next 48 months before eventually unfreezing it.
The proposal aims for greater decentralization and, if executed, could see the supply of Toncoin drop by around 20%.
A Crucial Proposal
TON validators are getting ready to vote on an important proposal on the 21st of February. The proposal in question will look to adjust the circulating supply of Toncoin, and if passed, could see the supply of the token drop by around 20% by freezing them for a period of 48 months. The team at TON announced the proposal on the protocol’s official Twitter handle, which tweeted,
“On the 21st of February, on @ton_blockchain, the validators will vote on a proposal to optimize tokenomics. If the proposal is accepted, the circulating supply of Toncoin will be reduced by ~20% by freezing it for the next 48 months and then unfreezing it. This proposal could affect the market capitalization of Toncoin and increase the transparency of tokenomics for the cryptocurrency community represented by users, developers, investors, and other projects.”
The proposal, if passed, could have a significant impact on the market capitalization of Toncoin. Additionally, it would help to increase the transparency and tokenomics of the project for the larger community, which includes investors, users, developers, and other projects associated with TON. The proposal to optimize the tokenomics of the TON network was first proposed on the 17th of December, 2022.
The proposal in question will freeze inactive accounts, primarily belonging to the first TON miners. The inactive wallets in question contain around 1 billion tokens, equalling around 20% of the entire supply of Toncoin. Suppose the proposal is passed by the validators. In that case, we could see the total supply drop to around 4 billion tokens, with the tokens held in the inactive accounts frozen for 48 months, following which they will be unlocked again. Currently, there are around 1.47 billion Toncoins in circulation, according to data from CoinGecko.
According to the team, the idea behind the proposal is to facilitate and increase the network’s decentralization by reducing the control of the whale wallets in question. The team explained,
“The current group of active first miners could, with the amount of TON coin at their disposal, build a network of validators in 48 months and earn even more TON.”
However, the team added that only whales that have over 300,000 TON coins, valued at around $700,000, can become network validators and vote on the proposal in question. Those wishing to stake fewer TON tokens can do so in separate pools. The team also factored in the impact freezing of assets on such a large scale could potentially have, stating,
“The reduction in liquidity may attract new investors, but, on the other hand, the centralized control of frozen addresses may scare off other investors because of the perception that their address could be frozen at any time.”
On the day of the announcement, Toncoin was only able to make a marginal gain. The token’s price has remained relatively flat over the past month and has managed to gain only a little over 8% since the start of the current year, despite other tokens seeing a considerable increase in price. The potential locking of a billion tokens, however, could give a boost to the price in the short term.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.