Osmosis passed proposal no. 1053 to stop OSMO inflationary issuance

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Osmosis The community passed a proposal to stop OSMO inflationary issuance and shift to protocol revenue distribution

BlockBeats reports that October 27, according to Osmosis governance page, proposal no. 1053“Terminate OSMO Inflationary Issuance” was approved by a vote on October 26, with a support rate of 91.07%and voter participation of 65.38%.

After the proposal passed,Osmosis will stop issuing OSMO through inflationary issuance. Staking rewards and the community treasury will no longer receive newly issued tokens, and staking returns will depend entirely on protocol revenue, including transaction fees. Meanwhile, the developers’ daily unlock of approximately 30,440 OSMO tokens will also be suspended. The remaining approximately 51900000 OSMO tokens will remain in the developer vesting module account, and any future release will require a separate governance decision.

The proposal states that ending inflationary issuance will eliminate dilution from new supply and that burns generated by transaction fees and ProtoRev revenue will directly reduce the token supply. Although the staking annual percentage yield contributed by inflationary issuance (APR) of approximately 2 percentage points will disappear, the proposal expects that some of the loss in returns will be offset by approximately 1052 percentage points of additional 1.7 resulting from proposal no.APR increasing the share of transaction fees distributed.

Original link https://m.theblockbeats.info/flash/373826

Key points

According to the Osmosis governance page, proposal no. 1053“Terminate OSMO Inflationary Issuance” was October 26 approved.
The proposal received 91.07%support, with voter participation of 65.38%。
After the proposal passed,Osmosis will stop issuing OSMO, and staking rewards and the community treasury will no longer receive newly issued tokens.
Staking returns will depend entirely on protocol revenue, including transaction fees.
The developers’ daily unlock of approximately 30,440 OSMO tokens will be suspended, and the remaining approximately 51900000 OSMO tokens will remain in the developer vesting module account.
Any future release of the remaining developer tokens will require a separate governance decision.
The proposal states that ending inflationary issuance will eliminate dilution caused by new supply, while burns generated by transaction fees and ProtoRev revenue will directly reduce the token supply.
The staking APR contributed by inflationary issuance, approximately 2 percentage points, will disappear; the proposal expects proposal no. 1052 to increase the share of transaction fees distributed, bringing approximately 1.7 percentage points of additional APR。

AI-assisted interpretation

The following is analysis, separate from reported facts. Verify important claims independently.

Simply put,Osmosis will no longer use newly issued OSMO to pay staking rewards, but will instead use protocol revenue such as transaction fees. The developers’ routine token unlocks are also suspended, and any future release will require another governance vote.

Why it matters to readers

Ending inflationary issuance and suspending developer token unlocks can reduce new supply; however, stakers’ future returns will depend more on the transaction fees and ProtoRev revenue actually generated by the protocol.

Beginners holding or staking OSMO should note points: new token supply will stop increasing, but staking returns may change, so future returns cannot be assessed solely based on past APR.

Risks and unknowns

The evidence does not specify the exact implementation time for ending inflationary issuance and suspending unlocks.
Whether protocol revenue can sustainably offset the approximately 2 percentage-point reduction in staking APR still requires validation with subsequent data.
The approximately 1.7 percentage points of additional APR is a projected value in the proposal, not an achieved result.
Future governance may still decide to release the tokens remaining in the developer vesting module account OSMO。

Osmosis passed proposal no. 1053 to stop OSMO inflationary issuance

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