Klaytn Proposes Burning 48% of Total KLAY Supply

As part of its restructuring process, the Klaytn Foundation is seeking approval from the Governance Council to burn nearly half of the total KLAY token supply.

The Klaytn Foundation has submitted a proposal to the Governance Council to reduce the total KLAY supply by burning 5.28 billion KLAY out of the 7.28 billion tokens held by the project, which have been inactive for the past 3 years and 8 months. This represents 48% of the total KLAY supply. However, Klaytn plans to retain 2 billion KLAY, creating a "Value Creation Fund for KLAY" to support various use cases and plans aimed at driving deflationary pressure on KLAY.

The fund will focus on building essential infrastructure for the ecosystem, such as oracles, and investing in promising projects to enhance overall network value.

Additionally, Klaytn aims to stimulate KLAY demand through partnerships with major ecosystem projects, particularly those looking to integrate KLAY in a "use and burn" token model, leveraging KLAY’s function as a transaction fee.

The proposal will be discussed and voted on between February 22 and February 28.

The proposed burn of 48% of the KLAY supply is part of a broader restructuring by the Klaytn Foundation, which includes allowing public users to participate as validators, establishing mechanisms for KLAY holders to engage in governance, and adjusting KLAY’s tokenomics.

Price & TVL Metrics:

KLAY has recently experienced a strong recovery in line with the broader cryptocurrency market.

1D KLAY/USDT Chart on Binance as of 5:35 PM, February 22, 2023

However, according to DeFiLlama, the Klaytn blockchain currently has a Total Value Locked (TVL) of $192 million, ranking 15th among blockchains with the highest TVL. The 24-hour trading volume on this blockchain stands at just $25 million.