Sustainable KSM Economics via Burn Mechanisms (v1.2)

This proposal introduces activity-responsive tokenomics for Kusama through burns instead of a hard cap.

Key changes:
• Base inflation: 7.82% → 5%
• Fee burn: 50%
• Treasury inflow burn: 10%
• Treasury balance burn: 1% per period (100K KSM floor)
• Coretime burn: 25%

Result: Net inflation reduced from 7.82% to ~4.25% — a 46% reduction.

This proposal is complementary to @olanod's validator/core reduction plan. Together they address both supply side (burns) and cost side (validators).

Full proposal: https://gist.github.com/hantoniu-codeberg/b81ab97a9d31d1651e890aa12bb02610

Forum discussion: https://forum.polkadot.network/t/rfc-burn-based-tokenomics-for-kusama-the-ethereum-model-not-a-hard-cap/16540

Edited

Kusama is changing how it handles tokens to respond to network activity.
Instead of setting a fixed limit, it will burn (permanently remove) some tokens.
The base creation of new tokens is being reduced from 7.82% to 5%.
Half of all transaction fees will be burned.
Small percentages of Treasury funds will also be burned regularly.
These burns aim to lower overall new token creation to about 4.25%, a big decrease.
This plan works alongside another to reduce network costs.
The goal is to make Kusama's token economics healthier and more responsive.

Source

This proposal introduces activity-responsive tokenomics for Kusama through burns instead of a hard cap.

Key changes:
• Base inflation: 7.82% → 5%
• Fee burn: 50%
• Treasury inflow burn: 10%
• Treasury balance burn: 1% per period (100K KSM floor)
• Coretime burn: 25%

Result: Net inflation reduced from 7.82% to ~4.25% — a 46% reduction.

This proposal is complementary to @olanod's validator/core reduction plan. Together they address both supply side (burns) and cost side (validators).

Full proposal: https://gist.github.com/hantoniu-codeberg/b81ab97a9d31d1651e890aa12bb02610

Forum discussion: https://forum.polkadot.network/t/rfc-burn-based-tokenomics-for-kusama-the-ethereum-model-not-a-hard-cap/16540

Edited