We’re about to put into action one of the important decisions made in Proposal 20 of the tomi DAO – using tomi’s allocation of DOP tokens to burn TOMI tokens and fund the tomi DAO. If you’ve been following along, you’ll remember that this proposal set up two main ways to use our DOP token revenue. First, we’ll be using half of it to buy and burn TOMI tokens, which reduces the total number of tokens in circulation. The other half goes straight into the DAO’s fund, where the community can decide how to use it through their proposals.
This all started with our allocation of DOP tokens – we received 10% of the total supply, which becomes available to us gradually over 18 months. Now that we’re ready to convert these DOP tokens to USDT, we can begin both the token burning process and the regular contributions to our DAO fund.
In this blog, we’ll provide a comprehensive overview of these actions, including how they work, their impact, and what they mean for the future of tomi.
What is a Token Burn?
A token burn involves permanently removing tokens from circulation, effectively reducing the total supply. In tomi’s case, this will be achieved by using 50% of the revenue from DOP token sales to purchase TOMI tokens, which will then be burned. This mechanism aims to:
- Enhance Scarcity: Reducing the total supply of TOMI increases its scarcity, potentially driving up its value.
- Support Token Holders: By strengthening the tokenomics, the token burn benefits long-term TOMI holders.
- Bolster Ecosystem Growth: Improved token liquidity and value can attract new participants and partnerships.
How Does the Token Burn Work?
Each month, 10% of the total DOP allocation will be directed to tomi. As decided by the tomi DAO, we will sell these tokens and use them as followsl:
50% of the proceeds will be used to purchase TOMI tokens for burning. The amount of TOMI burned will vary based on market conditions, including the exchange rates of DOP, TOMI, and USDT.
- Frequency: The burn will occur once a month during the second half of each month.
- Duration: This process will continue for 18 months, in alignment with the vesting schedule of DOP tokens.
The remaining 50% of the revenue from DOP token sales will be allocated to the tomi DAO fund. This fund enables the community to:
- Decide Priorities: All TOMI token holders can propose and vote on initiatives, ensuring transparency and decentralization.
- Support Development: Funds can be used for ecosystem grants, marketing, infrastructure, and other growth-oriented efforts.
- Sustain Operations: The DAO fund ensures that the project remains community-driven and sustainable in the long term.
Why is This Important for TOMI?
These actions will allow tomi to:
- Foster Community Ownership: The DAO fund places control directly in the hands of TOMI holders, reinforcing the principle of decentralization.
- Optimize the Tokenomics: The token burn reduces supply, supporting token value and sustainability.
- Drive Ecosystem Growth: Resources allocated to the DAO ensure continuous innovation and development.
The monthly token burns and DAO funding create a steady framework for maintaining our ecosystem. We encourage you to stay involved, share your ideas through proposals, and take part in the governance process. Your participation in the DAO helps shape tomi’s development, and we look forward to seeing your contributions.
