BitDAO’s BIT price was little changed on Thursday after the developers unveiled a new proposal for adjusting Bybit’s contributions to its treasury. The goal of this proposal will be to improve the token’s tokenomics and lead to more decentralization.
BitDAO proposes new Bybit contribution mechanisms
BitDAO, a decentralized autonomous organization (DAO) of great stature, released a statement stating that a core contributor had submitted an important proposal to change the tokenomics. The proposal targets contributions made by Bybit, one the most prominent cryptocurrency companies in the world.
The major part of the adjustment will be to convert the Bybit contributions, which were previously dynamically exchange-linked amounts, to a fixed schedule amount that lasts for over 4 years. The monthly schedule will be 120 million BIT. The amount will be halved every year to boost its tokenomics.
Further, the new changes will help to retain Bybit’s contributions in the community instead of burning them. Token burning is the act of taking tokens out of circulation and locking them in an inaccessible or unopenable account.
This upgrade is important
Numerous benefits will result from the upgrade. For one, it will help to increase the stability and predictability of BIT’s tokenomics. This will happen by having a clean schedule of Bybit’s activities going forward. Further, it will lead to more decentralization of BIT’ holdings and overall governance.
It will also reduce the amount of BIT currently in circulation, which will drop from approximately 6 billion to 3.3 million in the next few decades. Reduced supply of tokens tends to have a positive impact on a crypto token’s price. BitDAO will also see a 1.8x increase in its voting power and economics.
Bybit is an important part of BitDAO’s community. It has contributed over $600,000,000 USDT/USDC to BitDAO Treasury and 177k Ethereum over the years. According to the statement,
“BitDAO will continue to partner with Bybit in terms of product ideation, bootstrapping product development, BIT integration, and product distribution.”