Remove the permission of mint New SSV Tokens Permanently

Motivation

The purpose of this proposal is to permanently eliminate the permission to mint new SSV tokens. By doing so, we aim to maintain the total amount of SSV tokens at its current level, preventing any further increase. This initiative is driven by the belief that encouraging deep problem-solving and fostering value within the existing token ecosystem is more beneficial than resorting to minting new tokens as a solution.

The current practice of minting new SSV tokens as a means to address various challenges sets a problematic precedent. Continuously relying on token minting as a solution overlooks the underlying issues and can potentially harm existing SSV holders’ interests. Instead of constantly resorting to token inflation, we should focus on maximizing the value of existing tokens, thereby generating returns for holders.

Proposal Details

Renounce SSV token owner from address 0xb35096b074fdb9bBac63E3AdaE0Bbde512B2E6b6
To
0x0

After removing the permission to mint new SSV tokens permanently, we will encourage the community to shift its focus towards sustainable growth strategies. This move aims to cultivate a culture where innovation and problem-solving are prioritized over token inflation. Ultimately, it will contribute to the long-term stability and prosperity of the SSV ecosystem, safeguarding the interests of all stakeholders.

3 Likes

Hi!

A working group is currently developing an outlook for the DAO budget, runway projection, and potential income (minting vs. network fee). The group will consider all options, including this one.

It’s good to raise your opinion and there are pros and cons to each option.

Once the working group has the proposal ready, it will be posted on the forum.

Thank you!

3 Likes

We could also explore a similar approach that Ethereum took with EIP-1559. :globe_with_meridians:

Presently, SSV Network has two types of fees: Operator Fees and Network Fees.

:wrench: The Operator Fees follow a free-market approach, allowing operators to set their desired fees. We should maintain the current structure for Operator Fees because it fosters a competitive environment, ensuring high-quality and cost-effective services for validators. :heavy_check_mark:

:bulb: For the Network Fees, a different strategy can be implemented to address token inflation issues. Here’s the proposed approach based on the EIP-1559

Modified EIP-1559 Implementation for Network Fees

  1. :chart_with_upwards_trend: Network Fee Mechanism: Introduce a dynamic network fee that adjusts based on network demand. This network fee will fluctuate with network congestion, increasing during high demand and decreasing during low demand.
  2. :arrows_counterclockwise: Split Allocation and Burning: Instead of burning the entire network fee, split the fee into two parts:
  • :moneybag: Allocation to DAO Treasury: A portion of the network fee will go to the DAO Treasury to ensure continuous funding for network development and ecosystem projects.
  • :fire: Burning: The remaining portion of the fee will be burned to create deflationary pressure on the SSV token supply.

Example of Fee Allocation

  • Normal Condition:
    • Total Fee: 0.01 SSV
    • To DAO Treasury: 0.007 SSV (70%)
    • Burned: 0.003 SSV (30%)
  • High Congestion:
    • Total Fee: 0.012 SSV
    • To DAO Treasury: 0.0084 SSV
    • Burned: 0.0036 SSV

The SSV Network DAO could regularly monitor the impact of this new fee structure and adjust the split ratio as necessary based on network conditions and treasury needs. :bar_chart:

Benefits

  • :money_with_wings: Funding the DAO: Ensures continuous funding for the DAO Treasury to support ecosystem development and growth.
  • :chart_with_downwards_trend: Deflationary Effect: Maintains a deflationary pressure on the SSV token supply, potentially increasing token value.
  • :straight_ruler: Predictable Fees: Provides a stable and predictable fee structure for validators, improving user experience.

Challenges

  • :gear: Implementation Complexity: Requires careful implementation and testing to ensure the fee allocation mechanism works correctly.
  • :earth_africa: Community Consensus: Needs broad community support and consensus to adopt this new fee structure.

By adopting this modified approach, the SSV Network can achieve the dual goals of creating deflationary pressure through burning fees while still ensuring that the DAO Treasury receives adequate funding to support the network’s growth and development. :rocket:

4 Likes

I agree that we should minimize minting, and the community should definitely push back against becoming dependent on it. But minting can sometimes be very valuable, and at this moment, I think it makes sense.

SSV just launched, and we’re still in the “try to grow as fast as possible” stage. There’s a lot more development that needs to get done and many great points of leverage that can be pushed on to expand the network. Spending aggressively now allows us to do this.

This might be at the expense of a little inflation, but that’s ok… We’ll very likely get much more value back than we’re spending. And while we could cover our expenses by increasing the network fee instead, I think there’s value in keeping costs to stakers very low for now (for the same goal of maximizing growth).

So I’m with you… just not yet. Let SSV mature first.

4 Likes

I don’t think what you mean by “This might be at the expense of a little inflation, but that’s ok… We’ll very likely get much more value back than we’re spending.” Good for current holders, Although the vote for the additional issuance passed this time, more holders’ SSV tokens are in the exchange and no voting was conducted. I believe the DAO is very clear about how it passed. This vote cannot truly express the thoughts of the holders.

Another example why should remove the mint permission

Yesterday, they can inflation SSV token for incentive operators.
Today, they can inflation SSV token for market markers.
Tomorrow, they can inflation SSV token for this and that…

This endless inflation of SSV, will hurt all of current SSV holders and supporters.