Let it burn - Burn META In Treasury

Authors

doctor.sol & rar3

Overview

Burn ~99.3% 979,000 of treasury-held META tokens to significantly reduce the FDV, with the goal of making META more appealing to investors and enhancing community engagement.

Background

The META DAO is currently perceived to have a high Fully Diluted Valuation (FDV) due to the substantial amount of META tokens in the treasury, approximately 985,000 tokens. This high FDV often discourages potential investors and participants from engaging with META, as they may perceive the investment as less attractive right from the start.

Issue at Hand

The primary concern is that the high FDV and treasury leads to the following problems:

1. It encourages the use of META for expenses.
2. It lowers the attractiveness of META as an investment opportunity at face value.
3. It reduces the number of individuals willing to participate in this futuarchy experiment.

While a high FDV can deter less informed community members, which has its benefits, it also potentially wards off highly valuable community members who could contribute positively.

Examples

• https://imgur.com/a/KHMjJqo
• https://imgur.com/a/3DH2jcO

Proposed Solution

We propose burning approximately ~99.3% of the META tokens -99,000 tokens - currently held in the DAO's treasury. This action is aimed at achieving the following outcomes:

• Elimination of Treasury META Payments: Reduces the propensity to utilize $META from the treasury for proposal payments, promoting a healthier economic framework.
• Market-Based Token Acquisition: Future requirements for $META tokens will necessitate market purchases, fostering demand and enhancing token value.
• **Prioritization of $USDC and Revenue**: Shifting towards$USDC payments and focusing on revenue generation marks a move towards financial sustainability and robustness.
• Confidence Boost in META: By significantly reducing the supply of META tokens, we signal a strong commitment to the token's value, potentially leading to increased interest and participation in prop 10 execution.
• Attracting a Broader Community: Lowering the FDV makes META more attractive at face value, inviting a wider range of participants, including those who conduct thorough research and those attracted by the token's perceived tokenomics.

Rundown of Numbers:

• Current Treasury: 982,464 META tokens
• After Burning: 3,464 META tokens
• Post-Proposition 10: An expected 1,000 META tokens should be added back from multisig after prop 10, ranging anywhere from 0 to 3,000 META.
• Final Treasury: After burning, the treasury would have around 4,500 META, valued at $4 million, plus $2 million in META-USDC LP at todays price $880 / META.
• Total META supply: 20,885

Note

Adopting this proposal does not permanently cap our token supply. The community is currently discussing the possibility of transitioning to a mintable token model, which would provide the flexibility to issue more tokens if the need arises.