A new proposal on the @osmosis governance forum would send 55.5M $OSMO from the community pool to a burn address, permanently removing about 7% of the token's supply. Added to the roughly 44.
A new proposal on the @osmosis governance forum would send 55.5M $OSMO from the community pool to a burn address, permanently removing about 7% of the token's supply. Added to the roughly 44.4M OSMO already burned, the all-time total would rise to about 100M. About 63.8M OSMO would remain in the pool for later use or another burn.
The community pool is the on-chain treasury that governance can spend through votes. For years it also received most of the new OSMO minted each day. According to TechFlow, earlier proposals 957 and 967 directed most newly issued daily OSMO into the pool, creating a "soft burn": the tokens stayed out of circulation but could still be spent through future governance proposals. A permanent burn would remove that option for the tokens sent to the burn address.
The proposal follows a series of burns tied to the pool. In early October, two forum threads proposed withdrawing idle liquidity positions and burning about 17.4M OSMO, according to CoinGabbar. Osmosis had also said it planned to burn most of the OSMO held in the community pool and stop sending new issuance there, as reported by ChainCatcher.
Asked whether validators can still be compensated, proposal author Johnny Wyles pointed to a reserve of non-OSMO assets in the pool and to more revenue now flowing to stakers. The proposal is due to go onchain for a vote on Friday.
The context supports that argument. Osmosis passed Proposal 1053 on October 26, which ended daily OSMO issuance and shifted staking rewards to protocol revenue, according to Hokanews. The same report says an earlier measure, Proposal 1052, raised the stakers' share of taker fees collected in non-OSMO assets from 22.5% to 47.5%, with the extra allocation redirected from the community pool.
With no new issuance, burns now reduce supply without an offset. Staking yield is now funded by fees rather than inflation, so validator income depends on trading activity. Blockchain Reporter noted that follow-through depends on whether revenue-funded staking yield is enough to keep validators bonded and stakers committed.
The vote will show whether holders want to retire a large part of the treasury's OSMO or keep more of it available for future spending.
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