Komodo Platform — a market leader in cross-chain DEX technology — is excited to announce the implementation of a new mechanism known as the ‘KMD burn program’, which destroys/burns KMD (reduces circulating supply) as Komodo Wallet’s decentralized exchange (DEX) gains adoption.
Komodo Wallet boasts the widest cross-chain/ cross-protocol trading support of any DEX on the market. Its built-in DEX uses atomic swaps, a type of peer-to-peer (P2P) trading technology that presents an alternative to automated market maker (AMM) DEXs and centralized liquidity pools.
More specifically, the KMD burn program is a burn mechanism that is applied to Komodo DeFi Framework — the underlying protocol of Komodo Wallet. This means that Komodo Wallet as well as 3rd party apps (i.e. GleecDEX, MarmaraDEX, etc.) that utilize Komodo DeFi Framework will also adopt the burn mechanism.
Starting today (December 13, 2023), each time that a user trades KMD on Komodo Wallet’s DEX as a market taker, 25% of the DEX transaction fee goes towards automatically burning KMD. There are zero DEX transaction fees for market makers on Komodo Wallet’s DEX.
It’s crucial to understand that the KMD burn program doesn’t increase or decrease the total amount of fees the market taker spends. The fee amount remains the same as before; only the way of using the collected fee changes.
In 2024, Komodo plans to expand the KMD burn program to include non-KMD trading pairs.
The KMD burn program marks the second phase of an initiative to reduce the KMD coin’s circulating supply.
Earlier in 2023, the Komodo community voted ‘yes’ on Komodo Improvement Proposal 0001 (KIP 0001), which reduced the KMD active user reward from 5.1% APY to 0.01% APY.
Komodo CTO Kadan Stadelmann commented, “Some cryptocurrencies either have infinite supplies or supplies that grow by large percentages year-over-year, usually only helping ‘the rich get richer’. KMD is moving in the opposite direction. The KMD burn program is a major step towards making KMD a more scarce asset gradually over time, similar to the supply-side tokenomics of well-known cryptocurrencies such as BTC and ETH.”
In 2024, Komodo also plans to hold an additional Komodo Improvement Proposal in which KMD holders will be able to vote on whether or not to reduce the KMD block reward, which could potentially further decrease the coin’s circulating supply.