JAKARTA The entity responsible for the development of the KLAY token, Klaytn Foundation, recently announced its new move to reduce the supply of KLAY tokens by 50 percent.
This step is expected to increase the value of KLAY and strengthen the prospects for core protocols. The optimization proposal for this tokenization will be decided through a vote by the Klaytn protocol Governance Council in events that will take place from February 22 to February 28.
If the proposal is finalized, as many as 5.28 billion KLAY units will be burned, equivalent to 73% of reserves and about 48% of the total KLAY supply. Preliminary printing reserves of 7.48 billion tokens will also be reduced to 2.2 billion after combustion.
While the remaining 2 billion tokens will form a 'KLAY Value Creation Reserve' and will only be used for initiatives that can encourage protocol deflation push.
According to a Coindesk report, the Klaytn blockchain became the center of attention in June 2019 through GroundX development efforts. This protocol is designed as a public blockchain focused on the metaverse, gamefi, and creator economy.
In order to increase KLAY's demand, the Klaytn Foundation is committed to increasing on-chain interaction by collaborating with key portfolio projects as well as fostering services in the Klaytn ecosystem, especially dApps who want to 'use and burn' KLAY as their main tokenomics model.
The Klaytn Foundation is also looking for new partnerships in a wider ecosystem that can help improve protocols. In addition, this protocol is working on a deflation approach to increase the value of KLAY and increase the use of digital currencies beyond its use as gas costs. In this effort, the Klaytn protocol is exploring the introduction of Oracles as one of the options that can be done.
"The desire to increase KLAY demand in several ways: first, increase on-chain interaction by collaborating with key portfolio projects as well as fostering services in the Klaytn ecosystem, especially dApps who want to 'use and burn' KLAY as their main tokonomics model," Klaytn said in his proposal.
In the long term, the total supply of KLAY tokens of 50% proposed by the Klaytn Foundation is expected to provide added value to KLAY and strengthen the position of Klaytn protocol in the blockchain ecosystem.
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