The Floki Inu community voted in favor of a recent governance proposal that sought to burn 4.2 trillion FLOKI tokens on a cross-chain bridge and reduce transactional tax.
The proposal passed with a 99.97% majority voting in favor of burning the bridge tokens while 0.03% voted against the proposal, developers said. The FLOKI transaction tax will be lowered to 0.3% effective 8 p.m. UTC on Feb. 3, while the 4.2 trillion tokens will be permanently burnt at 8 p.m. UTC on Feb. 9, 2023.
The scheduled token burn is worth over $100 million as of Monday, CoinGecko data shows.
Burning tokens is a way of reducing supply, which subsequently adds value to each token as long as the level of demand remains the same.
As such, the Floki Inu proposal pointed out security risks associated with bridges as another rationale. Last year alone saw over $2 billion lost or stolen from cross-chain bridges, as CoinDesk previously reported.
“More exploits and data have emerged to show how much of a threat cross-chain bridges could pose, especially if they hold a significant amount of a token’s supply,” the proposal stated.
“In Floki’s case, an exploit on our main cross-chain bridge would have a catastrophic impact on the project since this bridge currently holds 55.7% of what FLOKI’s total circulating supply should be. This is a lot of tokens, and that’s more than enough to drain the project’s liquidity pools and essentially destroy the project if exploited,” developers added in the now-assed proposal.
Developers behind Floki Inu, a Shiba Inu dog breed-themed project, previously told CoinDesk the move was part of a broader plan towards positioning Floki Inu as a serious decentralized finance (DeFi) project. The team has launched ongoing projects such as Floki Locker and the metaverse game Valhalla in the past few months.
