In the past week, FLOKI prices have rallied more than 100%. A recent governance proposal that sought to burn 4.2 trillion FLOKI tokens on a cross-chain bridge and reduce transactional tax is voted by The Floki Inu community in favor of them.
Developers said the proposal passed with a 99.97% majority voting in favor of burning the bridge tokens whereas 0.03% voted against the proposal. On February 3, the FLOKI transaction tax will be lowered to 0.3% effective 8 PM UTC and on 9th February 2023, the 4.2 trillion tokens will be permanently burnt at 8 PM UTC.
FLOKI Inu Proposal
A way of reducing supply is by burning tokens which also adds value to each token as long as the level of demand remains the same. Such as for another rationale is the Floki Inu proposal pointed out security risks associated with bridges.
As CoinDesk previously reported, last year alone saw over $2 billion lost from cross-chain bridges. According to the proposal, “More exploits and data have emerged showing how dangerous cross-chain bridges can be, particularly if they hold a large portion of a token’s supply.”
- The proposal passed with a 99.97% majority voting for burning the bridge tokens.
- 0.03% voted against the proposal.
- Ongoing projects such as Floki Locker and the metaverse game Valhalla has launched by the team.
since the cross-chain bridge currently holds 55.7% of FLOKI’s total circulating supply, and in Floki’s case which is an exploit on our main cross-chain bridge would have a catastrophic impact on the project.Using this many tokens can drain the project’s liquidity pools and potentially destroy the project if exploited,” developers said in the now-assessed proposal.
In an interview with CoinDesk, developers of Floki Inu, a Shiba Inu dog breed-themed project, said the move was part of a larger plan to position the project as a serious decentralized finance project (DeFi).In the past few months, ongoing projects such as Floki Locker and the metaverse game Valhalla has launched by the team.
Floki issued its token on Ethereum with a total supply of 10 trillion tokens initially, then expanding to the faster and cheaper BNB Chain in 2021 based on community requests. With its own total supply of 10 trillion tokens, the team had to start another contract on the BNB Chain.
In order to ensure FLOKI’s total circulating supply never exceeds a total of 10 trillion tokens, a cross-chain bridge was necessary to enable FLOKI holders to transfer FLOKI from Ethereum to BNB Chain. In order to provide the initial funds for the bridge, the team used 600 billion tokens from its treasury on Ethereum and BNB Chain.
So, more holders lock their FLOKI tokens on Ethereum and transferred those out on BNB Chain. In an official proposal, developers wrote, “Despite the fact that the majority of the supply remains on the ETH chain, there is now a balance between supply and demand that a bridge would not pose a threat to the project’s stability.”
