The Inu floki community voted in favour of a recent governance proposal to burn 4.2 trillion floki chips on a bridge between chains and reduce the transaction 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. Tax on FLOKI transactions will be reduced to 0.3% starting at 8:00 p.m. UTC on February 3rd, The 4.2 billion chips will be permanently burned at 20:00 UTC on February 9, 2023.
The planned token engraving is worth more than 100 million dollars starting Monday, CoinGecko data shows.
Token burning is a way to reduce supply, adding value to each token while the level of demand remains the same.
In this regard, the floki inu proposal highlighted the safety risks associated with bridges as an alternative justification. Last year alone saw over $2 billion lost or stolen from cross-chain bridges, as CoinDesk previously reported.
'More and more exploits and data have emerged to demonstrate how interconnected bridges can be a threat, particularly if they hold a large amount of the supply of a token,' said the proposal.
"when it comes to Floki, a feat on our main transverse bridge would have a catastrophic impact on the project as that bridge currently holds 55.7% of what should be the total supply of floki in circulation. That's quite a few chips, and this is more than enough to drain the project's cash reserves and basically destroy the project if it is run,' the developers added in the proposal now assed.
Creators behind floki inu, one project on the shiba inu dog breed, Already said coindesk the movement was part of a larger plan towards floki inu positioning as a serious decentralized funding project (challenge). The team has launched projects in progress such as Floki Locker and the game metaverse Valhalla over the last few months.
It's called Floki Bridge.
Floki first released his chip on Ethereum with a total supply of 10 trillion chips, before switching to the faster, lower-cost ETF channel in 2021 based on community demand.
The team had to launch a new deal on the nbr channel with their own total offer of 10 trillion chips. However, this required a cross-chain bridge to ensure that the FLOKI's total circulating supply at any given time never exceed a total supply of 10 trillion tokens and to allow for users to transfer their FLOKI from Ethereum to BNB Chain and vice versa.
At that time, the team used 600 billion of its cash on Ethereum and BNB Chain to provide up-front funding for the bridge.
Since then, most holders locked their floki chips on ethereum and transferred those to nbb channel. "For this reason.", while the majority of the supply is still on the ETH chain there is now such a balance that the absence of a bridge would not threaten the stability of project,” developers wrote in the proposal.