Under currently set parameters around 40% of burned Luna (24 million LUNA of current epoch) is directed to the
Treasury (12 million LUNA)
Validators/delegators (12 million Luna)
Treasury is overfunded.
According to the white paper, the Treasury’s main focus is the allocation of resources derived from seigniorage to decentralized applications (dApp).
A wise man once said:
Terra has always been super capital efficient at building
Grants shouldn’t ever be in the millions
Should be small here and there to kick things off and cover small cost.
Treasury is currently funded in Luna which is subject to price volatility.
This can lead to a disadvantage for the developer, should Luna’s price drop, the developer will have fewer funds than required to finish the project.
It can also make developers look bad in the eyes of community members if the price increases drastically after the proposal is submitted. People might think they want to much money for their project and vote against it.
Cap treasury pool at 1 million UST or less, whenever funds are used the treasury can be topped up again via seigniorage.
All extra Luna can either be
A) burned permanently
B) distributed to Validators/delegators
B) would be interesting as it would attract more people to buy and stake Luna, thus driving up the price of Luna.
Please share your thoughts/alternate proposals. A formal governance proposal will follow if this idea is favourable to the majority.
Also, this is my first proposal, I may need help to formally state this in governance.