Floki Inu developers propose burning tokens worth about $55 million

The Floki Inu project team brought two governance proposals to a vote in the DAO. They envisage burning 4.97 trillion FLOKI tokens worth about $54.7 million and a drastic reduction in the transaction tax.

#Floki‘s latest DAO proposal is live!

If this proposal passes:

— 4.97 trillion $FLOKI tokens (worth ~$54,670,000) in the Floki bridge will be burnt.
— The #Floki buy/sell transaction tax would be reduced to 0.3%.

Read the full proposal and vote here:https://t.co/nmx4cxJ6v1

— FLOKI (@RealFlokiInu) January 26, 2023

The vote will end on January 29. As of writing, support for the proposed measures had surpassed 99%.

The developers proposed closing the cross-chain bridge, where the designated amount of tokens is locked. The cross-chain interoperability protocol was designed to migrate FLOKI from Ethereum to BNB Chain without exceeding the 10 trillion token issuance limit. In the project team’s view, the proposal of tokens in both networks fulfilled its task — they assessed the token proposals in both networks as balanced.

Another reason for the bridge’s shutdown cited by the developers was security. In recent months cross-chain protocols have become one of the main vectors of attack, with losses from hacks exceeding $2.5 billion over the past two years.

“In the case of Floki, the exploit of our main cross-chain bridge would have catastrophic consequences for the project, as it currently holds 55.7% of the FLOKI in circulation. That is A LOT of tokens, and more than enough to drain the project’s liquidity pools and effectively destroy it,” the team said.

If approved, the developers plan to set a buffer period so users can move assets to the network they need.

As for the FLOKI transaction tax, the team reminded that it was introduced at 3% at the peak of the bull market when the cryptocurrency launched. The fees allowed early on to raise “millions of dollars” that funded development and growth of Floki Inu.

In the current bear market the tax brings in barely $30,000 per month, not enough to cover operating costs. Yet it negatively affects user adoption of the meme token, the developers emphasised. They proposed reducing the rate to 0.3%, which corresponds to the level set by most decentralized exchanges such as Uniswap.

“The proposal to abolish the FLOKI transaction tax is not something we are proposing lightly. We have discussed and considered it for more than a year, sometimes quite passionately,” the team said.

Regarding funding, the developers noted that closing the cross-chain bridge would return 600 billion FLOKI to the treasury. The funds were used to initially sustain the protocol’s operation. Of this amount, 250 billion tokens will be reserved for the treasury of the Valhalla metaverse ecosystem, and 350 billion, if necessary, will go to cover operating expenses.

Over the past 24 hours, FLOKI price rose more than 22% (CoinGecko). The token is trading at around $0.000013. This is roughly 96% below its November 2021 high.

The meme token’s market capitalization stands at about $125.6 million.

Earlier, in 2021, the project launched an advertising campaign in public transport in the United Kingdom, but under regulatory investigation.

Read ForkLog’s Bitcoin news in our Telegram — cryptocurrency news, prices and analysis.