DAO's New Proposal Could Change DONUT Dynamics | Users React Strongly
Edited By
Elena Ivanova
A significant governance proposal has surfaced, aiming to recalibrate the rewards structure for DONUT holders. This initiative comes as a response to concerns over users who frequently transfer large portions of their lifetime earnings, creating ongoing sell pressure on the token. The proposal, which requires community approval, seeks to ensure sustainability within the ecosystem.
Understanding the Current Reward Climate
Currently, the Donut DAO distributes monthly rewards based on users’ governance scores and participation levels. Critics argue that this system benefits those who farm DONUTs for immediate profit rather than contributing to long-term growth. The frequent sale of rewards has raised questions regarding the ecosystem's stability.
Unpacking the Proposed Penalty Mechanics
The new proposal suggests implementing a penalty multiplier for users transferring over 25% of their lifetime DONUT earnings. Here are some key details:
Multiplier Ranges: From a maximum of 1.0 (no penalty) to 0.1 (maximum penalty).
Impact of transfers: Transfers below 25% incur no penalty; selling 100% results in the lowest multiplier.
Exceptions: DONUTs utilized for special memberships or liquidity pool engagement won’t affect the calculations.
XX explains, "This sets a fair system for long-term holders who actively invest in the ecosystem."
Community Sentiment and Insights
Comments from the community highlight mixed feelings about the proposed changes:
Supporters argue that it would reward those who contribute to the system, saying, "This proposal is well conceived."
Concerns have emerged about how penalties could affect older users, with one member noting, "Although I hate that old users get punished the idea is good for the community."
A user questioned, "How will we differentiate between earned and bought DONUTs?" clarifying that the penalties will focus solely on earned tokens.
Key Takeaways
🔹 The proposed changes aim to reduce immediate sell pressure by penalizing frequent sellers.
🔸 Community feedback is largely supportive, emphasizing fair treatment for long-term holders.
⚖️ The system keeps exceptions for engaged users, promoting ecosystem activity.
While this governance proposal remains open for discussion, the broader implications for the DONUT ecosystem could be significant. It may pave the way for a healthier and more sustainable model that attracts serious stakeholders. As the vote approaches, community members will weigh in, further shaping future dynamics.
What Lies Ahead for DONUT Holders
As the community gears up for the vote on the proposed changes, there's a strong chance that we might see an overwhelming support for this proposal. Experts estimate around 70% of community members may favor the adjustments, as they could foster stability and attract long-term investment. If approved, this could lead to a decline in selling pressure and ultimately increase the value of DONUT tokens for dedicated holders. However, there's also a risk that the penalties may push away newer participants who see the structure as discouraging, which could lead to a decline in fresh engagement. A balanced approach will be crucial in shaping the future of the ecosystem.
A Fresh Look at Historical Shifts
Consider the rise of social media platforms in the early 2010s. Initially, these platforms faced backlash for their focus on engagement over substance, leading to a flood of trivial content. Over time, though, many platforms adapted their algorithms to prioritize quality interaction, allowing for more meaningful connections and loyalty among users. Similarly, the DONUT proposal reflects a pivotal moment for the ecosystem, where adjusting to the community needs could transform short-term challenges into long-term strength, emphasizing that sometimes, the most significant shifts in intent can follow steep climbs of initial resistance.