Introduce a deflationary mechanism: burn 1 BLD for every staking reward claim

Governance
1

Summary

This proposal introduces a simple and transparent deflationary mechanism for the Agoric ecosystem.

Whenever a user claims staking rewards, 1 BLD will be burned permanently.

The goal is to:

  • introduce a predictable supply sink

  • align network activity with BLD value

  • strengthen the long-term sustainability of the token economy

The mechanism is intentionally simple: 1 claim → 1 BLD burned.

Motivation

Currently, the BLD token economy faces three structural dynamics:

  1. Ongoing inflation through staking rewards

  2. Limited mechanisms that reduce circulating supply

  3. Low fee capture directly tied to token value

While staking secures the network, the ecosystem lacks a systematic way for normal network activity to contribute to reducing supply.

Introducing a burn tied to reward claims creates a natural counterbalance to inflation while remaining simple and transparent.

Proposal

When a user executes a staking reward claim transaction, the following will occur:

  1. The standard transaction gas fee applies (unchanged).

  2. An additional fixed fee of 1 BLD is charged.

  3. That 1 BLD is sent to the burn address, permanently removing it from circulation.

  4. The staking rewards are then delivered to the user.

Rule:

1 claim transaction = 1 BLD burned

If multiple rewards are claimed in a single transaction (for multiple validators), the burn still applies once per transaction, not per validator.

Why a Fixed Burn Fee

A fixed fee was chosen because it is:

  • Simple

  • Predictable

  • Transparent for users

Unlike percentage-based fees, a fixed burn does not require reward calculations or variable logic.

Users can simply choose to claim rewards less frequently if they prefer to minimize the relative impact.

Expected Benefits

1. Introduces a Supply Sink

Each reward claim permanently removes BLD from circulation.

Example scenarios:

Claims per day BLD burned per day BLD burned per year
1,000 1,000 365,000
5,000 5,000 1,825,000

This creates a deflationary pressure tied directly to network activity.

2. Aligns Network Usage with Token Value

Currently, claiming rewards extracts value from staking emissions.

With this mechanism:

  • every claim also strengthens the token economy.

3. Encourages Efficient Claiming Behavior

The fee encourages users to:

  • avoid unnecessary frequent claims

  • accumulate rewards before claiming

This can reduce unnecessary transaction volume.

4. Simple to Understand and Implement

This proposal:

  • does not modify staking rewards

  • does not introduce complex tokenomics

  • adds a single clear rule

Simplicity reduces governance and implementation risk.

Impact on Delegators

The impact is minimal for most users.

Rewards continue to accumulate normally.

Users who prefer can simply claim rewards less frequently.

Example:

Rewards claimed Burn fee Effective impact
50 BLD 1 BLD 2%
100 BLD 1 BLD 1%
500 BLD 1 BLD 0.2%

Governance Flexibility

If the ecosystem determines that the burn amount should be adjusted in the future, governance can revisit the parameter and modify it through a future proposal.

Conclusion

This proposal introduces a simple, transparent, and sustainable deflationary mechanism:

Burn 1 BLD every time staking rewards are claimed.

Benefits include:

  • reducing circulating supply

  • aligning network activity with token value

  • improving long-term tokenomics

  • maintaining simplicity and transparency.

Every reward claim should strengthen BLD.

2

This looks really good.