Mark Lamb of CoinFLEX on the topic of SmartBCH burning 50% of gas fees

I have mixed feelings on the concept of burns, so when smartBCH stated that they plan to burn 50% of gas fees, this post here by Mark Lamb helped raise some extra perspectives on the topic.

Source : SmartBCH telegram community

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Why Burning Matters: Aligns Incentives of all Stakeholders in the Ecosystem - Mark Lamb

smartBCH could have created it’s own governance token on top for fees. Could have allocated wangkui0508 and his crew of developers a bunch of “SBC” tokens or something. The tokenomics could be very different.

Even though it would have been tied to BCH’s Proof of Work, I personally would have found it a much less interesting product. What do these token holders want, what do they believe in? Should I buy it? I’d rather just continue HODLing my BCH and FLEX coins while building and marketing products for the community, than have to constantly monitor a new coin…I may dabble here and there but I’m vastly more of a long term investor than a trader so buying a new token is always hard.

smartBCH burning BCH and using BCH as gas was and is a commitment: this ecosystem is pro BCH. The ecosystem is committed to BCH, it’s part of the wider BCH ecosystem and aligned with BCH’s goals for the world long term. That was what sealed the deal for me to say: you know what, I can build here. BSC’s run by Binance (a competitor to my own exchange), ETH seems to not care about high fees (at least right now), and there’s a million other EVM systems out there, but I know what BCH folks care about and it aligns 100% with my vision of crypto’s future as money for the world and a powerful decentralised financial ecosystem.

I can burn BCH right now personally. If I do all of you who hold BCH will be slightly richer/better off, as your % ownership of the network will increase. Effectively my burning will be a gift to the BCH community.

smartBCH is exactly that: a free gift to all BCH holders. One we paid nothing for. Sure there was a 1000 BCH flip starter, but let’s be honest, the R&D for this project has been ongoing for 3 years.

If smartBCH does what we want it to do and creates a powerful DeFi and DApp ecosystem, it will result in burning large amounts of BCH every year. ETH with EIP1559 is making the policy decision to go from 100% of ETH fees going to miners to instead 100% of ETH fees going to be burned (and staking validators get the inflation only). smartBCH is acknowledging that HODLers are valuable (50% of gas is burned) and validators/miners are valuable as well (50% of gas goes to validators/miners). That balanced approach values all the contributors to the ecosystem without going “all in” on one party.

This aligns everyone. If you’re a passive HODLer of BCH that never touches smartBCH DeFi, you benefit. Heck you might even try out the DApps and DEXes and staking programmes that get built, simply for the fact that it’s making your BCH more valuable.

If you’re a miner of BCH you benefit too, you go from 2 revenue streams (BCH main net fees + BCH inflation) to 3.

BCH is inflationary. Everyday new BCH are mined and if the miners are not spending their Fiat-based electricity costs to indirectly buy more BCH, then those new BCH are sold on the market. Burning 50% of the gas fees aligns the DeFi users that will inevitably come into this network purely for the cheap fees, without necessarily believing in BCH. They’ll know that their fees aren’t just going to validators who will then sell them. They’ll know that 50% of their fees are getting destroyed forever. Psychologically that changes behaviours and aligns all parties (Devs, HODLers, DeFi users, miners/validators, etc).