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Polkadot developers consider deflationary mechanisms

polkadot-developers-consider-deflationary-mechanisms
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Polkadot developers consider deflationary mechanisms

The Polkadot (DOT) network is exploring ways to implement deflationary mechanisms to counterbalance inflation and accrue value for DOT token holders.

According to a new Request for Comments (RFC) proposal titled “Burn Coretime Revenue,” Polkadot aims to burn revenues generated from sales of unused Coretime on the network. Coretime refers to the basic unit of computation on Polkadot for processing transactions.

The rationale is that burning Coretime revenues would introduce a deflationary force to counter the inflationary nature of DOT as a utility token. This could help balance overall token inflation and benefit DOT holders collectively.

Additionally, the proposal argues that burning revenues would remove distortion from the Coretime market compared to diverting funds to the Polkadot Treasury. With burning, prices paid by Coretime buyers would be clear costs rather than providing secondary benefits to network participants who frequently interact with the Treasury.

The proposal has received positive feedback, with one Github user commenting that burning Coretime revenues could provide meaningful deflationary pressure for the DOT token. Although initial revenues may be low, the user argues this could still have a “tremendous positive social impact” by changing the token’s inflationary narrative.

The RFC indicates this proposal is still under discussion. While it remains to be seen if Polkadot will follow in Ethereum’s (ETH) footsteps and become a deflationary token, implementing deflationary mechanisms through burning unused network resources could make DOT more appealing and align network incentives. The coming months will determine if developers decide to proceed with burning Coretime revenues.