🔥Burning mechanisms

Scarcity is a key driving factor to increase demand in a token. There are currently two main sources of burning GLDGov from the total supply

GLDGov buyback and burn

33% of the rewards from the Gold DAO ICP neurons are going to a buyback and burn wallet. This means that those ICP are used to buy GLDGov on exchanges and subsequently burn them to reduce the total supply of GLDGov. A canister (atslz-hiaaa-aaaam-acq6q-cai) is taking care of automatically buying back and burning GLDGov at random intervals during the day.

In the current configuration, this canister uses 33% of its ICP balance per week to buy back GLDGov on ICPSwap during six events each day and subsequently burn them. So, every buyback event uses 7 x 6 x 3 -> 1/126th of the buyback and burn canister's ICP balance. The intention of this setup is to make sure there are always ICP in the canister's balance to perform buyback events while keeping the impact on the price due to slippage low. The burning events can be seen on its GLDGov balance.

Minting balance daily burn

As each Gold DAO neuron is accumulating maturity within the SNS at 0.1% per year (due to the 0.1% rewards within the SNS), 1 million GLDGov are minted every year to the total supply and automatically given to Gold DAO neurons. In order to keep the total supply of GLDGov deflationary, this amount is burnt to keep the token deflationary. The source of burning is taken from the rewards distribution.

The Gold DAO voting participants receive 40 million GLDGov per year as voting rewards. Including the 0.1% integrated rewards of the SNS, this sums to 41 million GLDGov. Therefore, 1 million GLDGov are taken from the rewards and the respective amount is burned daily. 1 million GLDGov burned over 1 year (365.25 days including leap year) yields 2'737.785 GLDGov / day. Therefore 39 million GLDGov are distributed as voting rewards per year and the user still receive 40 million GLDGov due to the 1 million coming from the 0.1% integrated rewards.

These burning events can be followed on the sns_neuron canister's GLDGov balance.