Setup a tiered discount mechanism on wallets which hold gZil for all transactions. This discount will not go to the user but instead automatically be used to buy gZIL to burn.
Abstract:
When users with as little as 5 - 25 gZil conduct any transaction on the ZIL blockchain, they receive a tiered discount that does not go to them, instead is automatically used to buy gZil from the open market to burn. This discount can range from 5% to 25%.
Motivation:
Ways to sustainably and incrementally decrease the supply of gZIL while increasing incentive for people to hold gZIL.
Some months ago, the fees for transactions on the Zilliqa network were increased in order to reduce the number of spam transactions, which would in a sense clog up the blockchain with useless transactions. This means that there should be scope for a slight reduction in the newly increased transaction fees. What this proposal suggests is a targeted approach to reducing transaction fees, for the greater good of the governance token, gZil.
By tying this reduction to gZil holders, we reward people for holding gZil, which can in turn raise awareness of gZil as well as increase the motivation to hold gZil. The potential end result is more engaged users, with a stake in governance as well as allowing gZil to have higher values to compare favourably with governance tokens from other blockchains, enhancing its competitive edge.
Specification:
Wallets that have at least 5 gZil will receive a 5% discount on transaction fees, in a tiered mechanism going up to wallets with at least 25 gZil receiving a maximum 25% discount on transaction fees. 5 tiers are envisioned.
This discount does not go to the user, but instead is automatically set up to buy back gZIL from the open market and then burned in order to decrease the supply of gZil on an ongoing basis.
Please raise any potential obstacles from either a tokenomics, feasibility or implementation point of view in the comments below.
Voted. Anyways I am a community member so I can’t delete or edit proposals that are not launched by me. Great stuff! Will be tweeting this for people to participate.
For now, I think the other proposal is better. But if gZil holders based on amount can automatically grant a discount on the #Zil fees directly instead of sending to buy gZil, it will increase holders as well.
brainstorming:
gzil value is indirectly correlated to zil. that said, will it be better to vote on applying this mechanism on reducing zil circulation instead?
afterall, gzil holders are already deeply vested in the zil ecosystem, including:
learning about the ecosystem
setting up their wallets
more likely than not, they will already be providing liquidity or staking ZIL / GZIL somehow
therefore, reducing the pool of zils will have a better effect because:
marketing. more often, people look at “mooning” coins. that will attract the attention of developers to build the ecosystem who in turn build zilliqa value.
high coin market cap in zil = high coin market cap in governance. when zil is 5B market cap, it will automatically translate to gzil being valued much higher.
that said, the long term holders automatically benefit by building the network. and the governance token should ideally just be focusing on making key decisions without tying too much incentive to it.
Hey all! Good to see new proposals coming in. Keep it coming! But an important note to add here is that its good to also include an execution plan and see how viable it is. If you submit a plan think of (1) What resources are needed, (2) which parties need to be included, (3) how difficult is it to implement, (4) If its too difficult, how can it be simplified?, (5) How to maximise the chances of it succeeding.
Let’s keep iterating and improving to make proposals as robust as possible:)
I like the idea of a tiered reward system for holding Gzil but am unsure that using the rewards to buy Gzil to burn is the best idea. Maybe a system where the fee is used to buy back Gzil and then distributed to Gzil holders, the higher your tier the greater the % of Gzil you get.
Thanks for the constructive feedback. The tiered reward system does sound like a good idea, it reminds me of the tiered return rates provided with the crypto.com rewards cards. As for which parties/resources need to be involved, it’s simply a matter of not knowing enough on my part. This proposal is mainly a response to the constant encouragement on social media to take initiative and come up with ideas and proposals. I imagine that a majority of the Zil community would be in a similar situation as myself. Wanting to contribute, but not really having a clue about what would work or how to get it set up. This was as close as I’d come to an idea that might work so I thought to give it a shot and let the community experts figure out if there is any merit to it. Thanks again.
