Why not burn glmr to make it deflationary?

Question

Moonbeam & Moonriver Official

Ultimate_thule

Why not burn glmr to make it deflationary?

#blockchain #cryptocurrency #english #moonbeam

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04.08.2022

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SvPatrik | NEVER DM YOU FIRST · Accepted Answer

The purpose of inflation in Moonbeam & Moonriver is to pay for ongoing security needs of the network. The primary security budget items are to pay for a parachain slot on an ongoing basis, and to incentivize collators to provide collation (block production) services to support the Moonbeam network. Of the 5% inflation, 1% goes towards incentivizing collators and 1.5% goes to the parachain bond reserve to accumulate on chain funds to pay for a parachain slot in perpetuity. The remaining 2.5% is for users that stake their GLMR tokens and help power the collator selection process. Fees on Moonbeam & Moonriver related to transactions and smart contract execution are handled in two ways. 80% of the spent fees are burned, which acts as a deflationary force and accrues value to existing GLMR & MOVR holders based on increased utilization of the network. 20% of the spent fees go to the on chain treasury which can be allocated via onchain governance to projects and initiatives which further adoption and engagement with the network.

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Why not burn glmr to make it deflationary?

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