PIP-50 : Plan to reduce $PSP total supply - Revoke and burn DAO vesting of year 3

Burning tokens that aren’t circulating has no impact on the price, so, why burn ? :sweat_smile:

For moonboyz who don’t understand how it works ? :sweat_smile:

Better to USE instead of Burn!

if you want a better price action, focus on how to reduce inflation instead of burning assets that aren’t even on the market

EDIT: I want to add that once burned, you can’t go back. $PSP can stay in the DAO Treasury without being burned.


Others have brought up similar points to me before, so I would just like to add that I find it risky to try to burn two year’s worth of budget because it is currently not needed. It adds a higher degree of risk to rely on an asset which is in much lower reserves in our treasury simply because the DAO has not spent the assets aggresively enough until now.

If we want to scale the DAO, it’s unlikely it would be sufficient for succesful growth, and we will need all resources possible. Just as a random example, if ETH emissions per user were to reduce in the future as more users get onboarded, we might need to re-allocate more of that 20% allocation to the Stakers.

Using two year’s worth of reserves for a one-time price speculation move against a DAO’s own token is something that I have never seen done before, and I don’t think that reducing the overall value of one’s own treasury is going to have as positive of an effect that many here have theorised before. If I heard of another DAO that decided to burn a significant part of the supply to make people pay attention to the project it would just make me even more worried about that DAO, as these assets could have been used for many other things.
Personally, limiting one’s future growth for short term clout and because we currently don’t need the tokens might not be the best way forward, and the consequences would be devastating if any of these speculative upsides do not end up happening.


As I mentioned earlier, we won’t find any other project in the same situation as ours. Most projects that undertake token burning are dealing with tokens already circulating in the market, which is not our case. Additionally, Synthetix, for example, halted its token inflation and implemented a buy-back and burn mechanism using the fees generated from Base.

It will take 9 years to mint back those 400 million tokens.

Taking a step back, I understand that burning 20% of the total supply might seem daunting. However, if we consider the first year, when the tokenomics were established with the sPSP pool, market maker, etc., and full rewards were in $PSP, we only claimed 59% of the total allocated for that year. Since switching to the SE model, we haven’t claimed any $PSP from the vesting contract. Notably, we’ve nearly exhausted those 59% after 2 years.

The main point of this proposal (maybe I didn’t state it clearly enough) is not the token price but to realign the protocol’s tokenomics with the new model. We can’t speculate on price since it’s all about supply and demand, as you all said. Let’s keep the $PSP price out of this debate, as no data will remain accurate for long.


As hightlighted by @enerow the main purpose of this proposal isn’t Marketing. So, I don’t understand the replies about that…
Also, it is important to respect the authors’ wish to make it a proposal instead of a research discussion. That’s why we should use the democratic way, and vote, rather than taking month to discuss it.

Indeed, all the arguments For and Against can be exposed here, so that everyone will be able to take its own decision, after carefully thinking about it.

I believe in the calculations shared on the proposal and replies. So, considering everything, I think this is a situation with a sure win, and a highly uncertain and improbable risk.
I choose Win, meaning I’m in favor of this proposal.

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I guess you mean 11 years from now ? (2025 + 9 = 2034) to get back the full 20%.

I’m not sure this is enough justification to make such an irreparable mistake IMO…

Can you provide a proof on that point?

All investors I’m talking with always make their projections using the fully diluted market cap.
Reducing the supply have an impact on the FDMC, and therefore have a good influence on the price.

Following up on the current proposal to burn 400M $PSP tokens, and echoing the sentiments expressed by dseeker previously, I believe we have an opportunity to adopt a strategy that not only seeks to increase token value but also significantly expands our user base.

Proposed Alternative: A Second Airdrop with Extended Vesting

In lieu of burning a substantial portion of our tokens, I propose we consider a second airdrop. This initiative would inclusively cover addresses missed in our initial distribution and reward those who have remained active with our protocol. This approach aligns well with dseeker’s perspective on attracting a broader audience.

Why This Approach Matters:

  1. Expanding Community Reach: By extending our token distribution, we can rectify any past distribution issues and engage a wider community, resonating with dseeker’s viewpoint on the importance of outreach.
  2. Rewarding Active Participation: Encouraging loyalty among current users and potentially attracting new users through this inclusive gesture.
  3. Sustainable Token Distribution: A vesting period similar to CoWSwap’s model would ensure a controlled release of tokens, providing market stability.
  4. A Conservative, Community-Focused Strategy: This method offers a balanced approach to increasing token value and user base, focusing on long-term health and growth of the protocol.

I fully support the idea of broadening our reach and believe this airdrop approach is a more conservative yet strategic alternative to burning tokens. It not only aligns with our growth objectives but also addresses the need for greater inclusivity and community engagement.

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Thank you for this proposal that caught my attention.

For me, the following points are very important:

  • Tokenomics Realignment: The proposal seeks to adapt token distribution to better match the current reward strategy post-Social Escrow (SE) introduction, emphasizing $Eth yields over $PSP tokens.
  • Supply Reduction for Scarcity: Burning 400M $PSP tokens allocated for years 3 and 4 will decrease the maximum $PSP supply from 2 billion to 1.6 billion, increasing scarcity and potentially enhancing market value.
  • Financial Sustainability: With an average gas refund expense of 1.5 million $PSP per epoch and surplus funds estimated to cover expenses for the next two years, the proposal aims for economic sustainability.
  • Long-Term Value and Price Impact: $PSP token price will augment, making the distribution model for gas refunds more efficient by decreasing token quantity.
  • Diluted Supply Enhancement: By reducing the total supply, the proposal aims to raise the diluted supply percentage from 38% to around 47.5%, aiming for a more favorable market perception and valuation.

Taking into account the low risks, I support this proposal and would be delighted to vote for it.


That’s the problem. You’re completely blinded by the potential use of these tokens.

These tokens had a purpose. Reward the stakers.

The rewards are now in ETH. These PSPs are no longer useful.
The fact that you and @lup think you can use them worries me to no end.

I asked you for figures that would help us understand your position. I didn’t see any. You ask for data, but you’re not fit to give any either.

Your obstinacy, with no basis other than your beliefs, escapes me.
This burn is factual.

Hey there.
I’m for this proposition.
I don’t have anything to add, the arguments have allready been made by those in favor.



Good to have such initiatives but I agree to keep this topic as research instead of a straight and rushed proposal that may have unknown impacts. The arguments of Against seem to be well backed while the argument of the Fors seem to be more driven by enthusiasm and emotions, which is fine but not what could signal the maturity of a DAO. Key decisions nowadays follow strict vetting processes from key stakeholders who have the technical and market expertise, DAO members play the role of making a sanity check and voting with their tokens. I understand that we’re not there yet but PSP can be used as a mean of payment when the liquidity (which is already very good) becomes deeper. Think Optimism, Arbitrum… all leveraging their tokens to incentivise their ecosystem.

I agree with that, what kind of alignment are we talking about? I don’t see a mention anywhere that PSP is meant only for PSP 1.0… This is a change in tokenomics, not a allignement

That’s barely 20k / month, it can pay 2 engineers max if the DAO want to become autonomous instead of relying on team’s own resources. Until the ETH income goes to 6 figures/m, which may or may not happen on the short/mid term, the DAO cannot call itself mature, that’s either ignorance or intellectual dishonesty.

I think that recaps very well.

To speak up more openly and directly:
You want to align with the tokenomics: That’s a pointless change.
You want to pump the price: the supply won’t change anything if nobody knows/cares about your bags.

Finally, same as the previous “marketing proposal”, some people here like to attack the very team that got us all here and all the credits should be attributed to them. I prefer listening to the experts, especially when they’re so alarming that this proposal is bad for ParaSwap.



Hi everyone,

As a member of our DAO, I can’t stress enough how crucial it is for us to understand the significance of burning tokens. This decision holds immense weight in shaping the future and stability of our ecosystem.

Firstly, burning tokens directly impacts our token’s value. Reducing the token supply makes each token scarcer, potentially driving up demand and consequently increasing its value. This isn’t just about short-term gains but also about creating a more robust and sustainable ecosystem for the long haul. As explained above, higher token value means less tokens distributed in Gas Refund Program, which means less sell pressure, which means higher value and more stability, and again less tokens distributed… I think you can see my point.

Moreover, it’s not just about token value, it’s about improving the overall tokenomics. A reduced token supply can positively influence liquidity, stability, and the incentives we offer to our community members. This translates to a healthier environment for everyone involved.

More than anything, voting this proposal demonstrates our commitment to community governance. It’s about respecting the proposals put forth by our members and working collectively towards the common good. It’s an opportunity for us to show that we’re responsive to the needs of our community and that we’re adaptable to changes that benefit us all.

In a DAO, it’s absolutely essential that everyone’s perspective is taken into consideration, regardless of their level of experience. While experience undoubtedly offers valuable insights, it’s equally important to value and respect the opinions of all community members, including those who might not agree with “the very team that got us all here” and “the experts”. @enerow is also an expert, in the ecosystem for more than 10 years I think, and he seems to be in favor of this proposal. Should we consider him stupid because he has a different opinion?

Diversity in opinions enriches the decision-making process within a DAO. It’s through the exchange of varied viewpoints that we can thoroughly evaluate the potential implications of burning tokens. Each member brings a unique perspective, and considering these diverse viewpoints can lead to more well-rounded and informed decisions.

Inclusivity is fundamental to the decentralized nature of a DAO. It upholds the principles of fairness and equality, ensuring that decisions aren’t made solely by a select few, but rather through a consensus that incorporates the voices of all participants. There is one way to let everyone have their say on the subject, and that’s to vote.

Personally, I see this as a strategic move. It aligns with our long-term goals and can significantly contribute to the overall health and sustainability. It’s not just about the immediate impact but about laying the groundwork for a more robust ecosystem that will benefit us all in the years to come. So, I strongly support this proposal to burn tokens as it can truly steer us in the right direction.


Hello Tucorini,

You seem to be aware of the amounts needed to pay paraswap’s developers and its internal operations.

Since I don’t see any answers to my questions about Paraswap’s needs here, could you enlighten me if you have any information?

I still believe that 400m PSP of claims 1 and 2 and the ETH revenues will be more than sufficient.
Then there are the amounts still in the foundation.

Thank you for your comments.
I see a lot of reluctance, always from the same 2/3 people, but few arguments, contrary to what you write.

Sorry, but I don’t see any counter-argument that is well-backed… I have provided numbers and facts on the current situation, but the arguments against it are just speculation that someday we might need them (In two years, we will be able to mint 2% of the total supply if needed. However, considering that 290 million isn’t enough for the next two years, where we barely used 90 million after the first two years, it’s uncertain what the future holds. But who knows? :man_shrugging:).
That would be nice for sure, but current data show that it’s barely probable that suddenly a ton of proposals will pop up and the treasury will be drained.

I also have questions for which I haven’t found any answers that could bring everyone onto the same page. During the tokenomics specification:
- How did you arrive at this 2 billion total supply?
- What was the plan with the 870 million of $PSP allocated to the DAO?

TBH,I get the feeling that those who are against this idea know what to do with those tokens, but they just don’t want to say it. :smile:


In this case, all your investors are st*pid, because it also depends on token inflation

Of course it is taken into account. But to assess the value of a protocol, they use FDMC because it’s a projected / an anticipated MC.
And then to decide if they will invest or not, they look at token inflation, which would be (1.6B - Current supply)/Current supply, instead of (2B - Current supply)/Current supply, so less inflation!

Thank you for giving me the opportunity to develop this point.

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The steam already generated by this proposal in just 2 days with many members commenting for the first time tells me this will have a massive impact. May be not as proposed, but if this topic could generate this kind of debates within the DAO, a burn or vested airdrop can definitely give us that propelling force to increase our community base.

My interest in the short term as expressed earlier is not token price but expansion of community base. Many Meme tokens with completely no use case thrive solely on the strength of their community.

I have said this before and I am going to say it again. For any organisation to succeed 5 key ingredients are needed called the 5 Ps of marketing

  1. Product
  2. Price
  3. People
  4. Process
  5. Promotion.

If you get all the other 4 Ps right but your are lacking in “People” which represents community in this case, their’s absolutely no way the organisation will succeed. It’s an undisputable fact that Paraswap is an excellent product. The protocol and DAO have a proven process and we have tried promotion in form of quests all to no avail. We need people.

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How much ? Do you read english or just blinded by conspiracy theories each time you see a post you don’t like. You attacked every single person who didn’t agree with the proposal here, a Dr can help you if you want recos, I can give you my email.

Big kiss love & try to learn 2 things: be polite & english :smiley:



Until now, I’d never felt the need to write, because I was aligned with the opinions of the majority, or with Lup’s opinion, and I felt that what I think would be well defended without my having to do so.

Although I did appreciate Lup’s actions in trying to block two previous proposals:

  • Aura went to the vote after a compromise between the parties
  • fortunately, the Questly thing, which was a waste of time and money, was voted Against

But in both cases, there was a vote, and that’s the essence of a DAO: voting to make decisions.

So I don’t support the idea of turning the proposal into a Research topic. Let’s have a fair vote, and respect the decision that will be taken by the community.

For now, I’m following the opinion of the majority, also the most documented and argued one, which is in favor of a burn.


Excuse me if I try to get answers from people who don’t want this burn to take place.

You’re announcing amounts. Keep explaining, I’m happy to get a few little answers to my questions.