First DAO proposal executed, 250m tokens removed from circulation forever.
Today is a very special day for the Armor protocol, marking the culmination of a series of events moving Armor into the next phase of the project.
- Early November Armor founder Robert started two connected discussions on the Armor forum about a possible burning of tokens and a restructuring of the founders’ tokens.
- Only 2 weeks ago, the new vArmor vault was introduced, in which Armor tokens can be single-staked for vArmor voting tokens.
- Soon after, the Armor WithTally on-chain voting frontend was ready, so vArmor owners could delegate their vArmor voting power (to themselves or to others) so that voting power could be used to vote on proposals.
- The first proposal was launched on WithTally a few days after: #ARP-001, about burning 250m Armor tokens (25% of total supply)
- The vote passed quorum, was accepted unanimously and will be executed today!
In this post, we will briefly expand on the proposal itself as well as the voting process.
We will focus on the resulting new tokenomics in a separate post.
Proposal [arP-001] — 250MM: Token Burn from Treasury
The content of the proposal:
- Burn 250MM token from the multisig treasury reducing the total supply of $Armor by ~25% to 750MM
The goal of this proposal:
- Improve the tokenomics of the governance token, provide peace of mind to our current holders, and generate marketing buzz about Armor.
Motivation and a breakdown of the tokens to be burned:
- After review of the total treasury value, the team believed that there is an unnecessary amount of $Armor tokens allocated to the following:
- Payout of Development Grants
- Education programs
- Future Team members
- Future DAO funding
After discussion on the forums, it is proposed to do a single burn, totalling 250MM tokens in the Armor Treasury. The belief is that this will:
- Improve tokenomics
- Be used as a marketing tool to advertise the protocol
- Improve peace of mind for current users
These are the current allocations to each program in the treasury:
- Payout development grants — 120MM allocated.
- Education programs — 60MM allocated.
- Future team members/partners — 162MM allocated, ~30MM has been disbursed so far (132MM remaining).
- Future DAO funding — 175MM allocated.
Cutting each allocation by 50% with an additional 5,773,200 from team funding would lead to a total of 249,273,200 $Armor.
The new allocations in the treasury being:
- Payout development grants — 60MM allocated
- Education programs — 30MM allocated
- Future team members/partners — 60,226,800 allocated
- Future DAO funding — 87.5MM allocated
- The 249,273,200 $Armor would then be sent to address 0x000000000000000000000000000000000000dEaD, functionally “burning” the tokens from the supply.
This amount, added to the previously 726800 $Armor burned from our previous social burns will equal exactly 250MM $Armor burned and a new total supply of 750MM $Armor.
The vote actually already included the code needed to send the tokens to the 0x00…00dEaD address, which is one of the Ethereum burning addresses (no keys exists, tokens sent there are gone forever.)
The voting process and results
The proposal was actually posted a bit too soon™, as though even enough Armor was staked in the vArmor governance pool, not enough votes had been delegated to count as actual voting power.
This is a bit counterintuitive, but all votes need to be delegated to someone, even if it (usually) means to yourself, in order for them to count as voting power.
The original proposal was therefore cancelled and reposted a few days later when there was enough voting power to approve or reject the proposal.
It took less than a day to reach the required Quorum, which is the absolute amount of votes needed to accept/reject a proposal. In Armor’s case, this is currently 30 million.
Timelock and execution
Once a vote passes, a proposal enters a time-lock for 2 days.
After this time passes, the code, which in this case sends 250MM tokens to a dead address, will execute.
Over 45 million votes were cast (95.18% of eligible votes!), and 100% of them voted in favour of the proposal!
The transaction was thus sent to a queue, as can be seen in the voting contract address.
Once 48hrs have passed (3 hrs from the time of the screenshots), anyone can call the execution of the vote, through the Admin section of the Armor WithTally DAO frontend (or directly through the contract on Etherscan).
By the time you read this, the transaction will likely have been executed by someone ([UPDATE: the tokens have been burned!]), meaning that 250 million tokens that were previously allocated will be gone forever, hugely impacting the tokenomics and upside for current Armor Token holders.
There are different ways to do DAO voting and currently, Armor has chosen a mix, though this is subject to change as the DAO can always make a proposal to change this!
- Off-chain voting using the forum. This is free, all you need is a forum account.
- On-chain voting using the Armor WithTally voting platform. To vote costs ETH as all votes and executions are on-chain.
Currently, Armor uses the off-chain voting for (a combination of) the following:
- Informal proposals
- Proposals about less important issues
- Proposals that need a quick result
- Signalling votes that might or might not lead to an actual on-chain vote.
And uses the on-chain voting for:
- Proposals about subjects that have a profound impact on the protocol, tokenomics etc
- Proposals that need to be executed automatically if approved
Voting costs and refunds
As it is important to Armor DAO Governance that on-chain voting isn’t hindered by the current high ETH mainnet gas fees, voting costs will be refunded to those who need it. If you feel that you have spent too much gas fees on either the vote delegation and/or the actual voting, please fill in this form.
Note that not only does this refunding use funds from the treasury, but refunding itself also costs gas fees and time from our team, so we ask you to only fill this if you feel that the gas fees are prohibitive for voting in your case.
What will be refunded? Gas fees spend on:
- Delegating your votes (to yourself or others)
- The actual Voting transaction
- Executing a vote’s result
What won’t be refunded?
- The staking of Armor in the vArmor pool as the pool itself already gives generous rewards.
Unless the DAO decides otherwise, we will repeat these refunds for future on-chain voting to ensure every vArmor holder can be a part of the Armor Governance.
Revised Tokenomics for the Armor Protocol
In a follow-up post the positive implications of this token burn for the Armor Protocol Tokenomics will be detailed.