TON Validators to Vote on Freezing 20% of Toncoin Supply
Validators on The Open Network (TON) are preparing to vote on a proposal to alter the project’s tokenomics and supply.
On Feb. 21, TON validators will vote on a proposal to adjust the circulating supply of Toncoin. If passed, the supply will be reduced by around 20% by “freezing it for the next 48 months and then unfreezing it.”
This proposal could affect the market capitalization of Toncoin, the team stated. It could also increase the transparency of tokenomics for the community, which includes users, developers, investors, and other projects
TON is a high-throughput layer-1 blockchain designed and developed by the Durov brothers, who created the messenger platform Telegram.
Aiming For Decentralization
On Feb. 14, a proposal to freeze inactive accounts from the first TON miners was discussed. The wallets contain around 1 billion coins which equates to around 20% of the entire Toncoin supply.
If passed, the total supply will be reduced to around 4 billion tokens and the frozen mining coins will be slowly unlocked. Currently, 1.47 billion tokens are circulating, according to CoinGecko.
The aim is to increase the network’s decentralization by reducing the control of these whale wallets. Last week, the team explained:
“The current group of active first miners could, with the amount of TON coin at their disposal, build a network of validators in 48 months and earn even more TON.”
However, only whales with more than 300,000 TON coins (around $700,000) can become network validators. There are pools available for those with fewer TON to stake.
Considering the consequences of such a large asset freeze, the team stated:
“The reduction in liquidity may attract new investors but, on the other hand, the centralized control of frozen addresses may scare off other investors because of the perception that their address could be frozen at any time.”
TON Price Outlook
Toncoin has made a marginal gain of 1% on the day to trade at $2.35 at the time of press. However, there has been very little movement in TON prices over the past month.
In fact, TON has only gained 8.3% since the beginning of the year, while some of its crypto brethren have skyrocketed.
TON/USD 1 month – BeInCrypto
The locking of a billion Toncoins may boost prices in the short term, but regular token unlocks have generally been bearish for prices on other tokens.