WFC: DarkHole Pallet - General purpose burn mechanism
This Wish for Change proposes a “Dark Hole” pallet – a continuously burning account – to address Kusama’s critical inflationary pressures and the loss of effective token burn mechanisms.
Kusama lacks deflationary mechanisms that can counter its high inflation:
- Loss of Burn Mechanisms: The Society pallet no longer burns tokens.
- Ineffective Coretime Market: All cores are acquired, renewals are near-zero cost, and new core sales are blocked.
- Developer Disincentives: Lack of core availability hinders new parachain deployments.
- Conflicting Initiatives: Parity’s Hub initiative wants to concentrate development in a system parachain that doesn't contribute to coretime-based burn.
As AH is positioned to become the center of future development activity, we built-in mechanisms in the Hub to capture value from protocols and potentially contribute to the deflation of the token.
I propose adding a simple pallet to AssetHub that acts like the 0x0000000000000000000000000000000000000000 address but actually burning tokens and taking them out of circulation. This enables protocols deployed on AH to create new deflation mechanisms.
This system is compatible with the configurable treasury burn, meaning a future proposal could configure the treasury burn to be directed to the dark hole pallet.
Future changes to the pallet could include an "event horizon" or "radiation" that allows part of the burn to "escape"/be directed to fund other initiatives as per previous WFC
Comments (6)
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Hi @olanod, thanks for the proposal. Just one question, aren't the smart contract developers going to be able to develop burn mechanisms themselves on their own contracts? What advantage does having a dedicated pallet for it provide other than a convenience mechanism?
@🏔 HELIKON 🏔 For their own tokens sure, but they cannot mess with the native token supply, this pallet gives them that, an address to send KSM to that can be taken out of circulation completely. Say I create a marketplace contract selling KSM denominated NFTs and the black hole address is the recipient of the funds, that KSM would be burned and the total issuance of KSM reduced.
I think it’s a good initiative to have a burn pallet on Kusama.
Based on my understanding of Daniel’s explanation, I support the fact that the tool can exist without specifying the burn sources and leaving it up to the community to later decide on ways to effectively take KSM tokens out of circulation.
Additionally when people create new protocols they will have the option to burn tokens using this pallet instead of depending on a parachain runtime upgrade to do so.