# Selendra Tokenomics Enhancement Proposal (STEP-01)

[rithythul]

Executive

This proposal introduces comprehensive tokenomics improvements for Selendra Network, focusing on sustainable growth, value capture, and long-term ecosystem health. The proposed changes optimize transaction fees, burning mechanisms, and treasury management.

Proposal Details

1. Current State

Current Parameters:

• Transaction Cost: 0.00005304 SEL
• Burn Rate: 70% of transaction fees
• No structured treasury burn
• Annual Inflation: 21M SEL

Issues:

• Minimal impact from transaction fee burning
• Lack of structured treasury management
• Supply growth potentially too aggressive

2. Proposed Changes

2.1. Transaction Fee Structure

• Base Fee: 0.001 SEL (1 mSEL)
• Burn Rate: 80% of all transaction fees
• Treasury Allocation: 20% of transaction fees

2.2. Treasury Management

• Treasury Share: 40% of annual inflation (8.4M SEL)
• Treasury Burn Rate: 30% of treasury allocation (2.52M SEL annually)
• Automatic burn implementation through smart contracts

2.3. Validator Rewards

• 60% of annual inflation to validators/stakers (12.6M SEL)
• Maintains attractive staking yields
• Ensures network security

3. Technical Implementation

3.1. Runtime Upgrades

pub struct RuntimeConfig {
    // Transaction Parameters
    BASE_FEE: Balance = 1_000_000_000_000;        // 0.001 SEL
    TX_BURN_RATE: Permill = Permill::from_percent(80);
    
    // Treasury Parameters
    TREASURY_SHARE: Permill = Permill::from_percent(40);
    TREASURY_BURN_RATE: Permill = Permill::from_percent(30);
}

3.2. Smart Contract Updates

• Implementation of new fee calculation logic
• Treasury burn automation
• Enhanced event emission for transparency

4. Expected Outcomes

4.1. Supply Metrics (By 2038)

• Final Supply: 507.69M SEL
• Average Growth Rate: 7.92%
• Total Growth: 118.75%
• Cumulative Burn: ~37.8M SEL

4.2. Network Economics

• Sustainable validator rewards
• Enhanced value capture
• Balanced deflation mechanism
• Improved treasury sustainability

Conclusion

This proposal presents a balanced approach to improving Selendra's tokenomics, focusing on sustainable growth while maintaining network security and ecosystem development capabilities. The implementation plan ensures smooth transition and continuous monitoring of outcomes.

Appendix

A. Parameter Calculations

# Annual metrics
TOTAL_INFLATION = 21_000_000
TREASURY_SHARE = TOTAL_INFLATION * 0.40  # 8.4M
TREASURY_BURN = TREASURY_SHARE * 0.30    # 2.52M
VALIDATOR_REWARDS = TOTAL_INFLATION * 0.60  # 12.6M

# Transaction metrics
BASE_FEE = 0.001  # SEL
BURN_RATE = 0.80
TREASURY_RATE = 0.20

This proposal requests community review and voting on the described tokenomics enhancements. All feedback and questions are welcome through the provided discussion channels.