Governance Vote: $SWEAT repurpose

The open economy of movement calls for each community member to make their voice heard, and you’ve all contributed to the largest governance vote in the history of Web3 in Part 1 of this proposal. (Still waiting for that call from the Guinness Book of World Records).

As you may know, over 355K community members cast their vote, and 83% of the community voted in favor of reclaiming idle tokens locked up for inactive user accounts–read more about the results and proposal process.

Now that we have reclaimed 2,492,673,109.55203 $SWEAT, it’s up to you to decide how to repurpose these tokens.

TLDR

Don’t want to read? Here’s a quick skim:

• Decide what to do with more than 2B reclaimed $SWEAT
• Option 1: Burn 1.2B of these tokens and allocate the rest to support the US launch in September 2023
• Option 2: Burn 1.8B of these tokens and allocate the rest to support the US launch in September 2023
• In-app vote will run for at least 14 days
• A minimum of 75,000 participants required
• 0.1 $SWEAT fee per vote; one vote per person
• Option with the majority number of votes wins

How we got here

After the first vote, the community went into overdrive and contributed a bunch of ideas on public forums like Discord and Telegram on how best to use the amount reclaimed. Some of the more interesting ideas included:

1. Split the amount reclaimed and propose to burn a part of it while repurposing the rest
2. Allocate a portion of the reclaimed tokens to rewards, distributions, or to support the upcoming US launch
3. A number of burn proposals suggested not to burn all the tokens in one go, but to burn them gradually to offset ongoing token emissions and, possibly, to make $SWEAT into a deflationary asset.

Eventually, the community landed on two ideas:

1. Burning $SWEAT
2. Token re-allocation to projects benefiting the community such as the US launch

How do these actions benefit you?

• Token burning is when a portion of tokens are permanently removed from circulation (CoinDesk). According to Sensorium, “markets function through demand and supply, and crypto projects use burning to reduce supply, increase demand and potentially add value to their crypto.”
• By engaging in the app, you generate demand through token sinks and other forms of monetization.

What is the proposal?

• Option 1: Burn 1.2B of these tokens and allocate the rest to support the US launch in September 2023.
• Option 2: Burn 1.8B of these tokens and allocate the rest to support the US launch in September 2023.

What is allocating?

This allocation means that the Sweat Foundation will keep behind the portion of tokens in preparation for the US Launch.

More details will come regarding how to claim and the proportions that US users will receive.

How will the $SWEAT be burned?

The percentage of $SWEAT that wins the vote will be burned over a period of time so that the exact total monthly supply of $SWEAT + 1 is burned each month until the entire balance is burned up.

In option 1, the tokens will be burned gradually over a period of ~10 months to ensure deflationary circulating supply starting July 2023 (the period is an estimate based on forecasts).

In option 2, the tokens will be burned gradually over ~24 months to ensure deflationary circulating supply starting July 2023 (the period is an estimate based on forecasts).

This guarantees a deflationary circulating supply each month! Burning will be manually calculated each month based on actuals, starting July 2023.

What does deflationary mean?

Deflationary refers to a characteristic or mechanism designed to decrease the supply of a token or cryptocurrency over time. It’s like having a limited edition of something that becomes more valuable because there are fewer of them available.

Voting rules

• Votes open July 7, 2023
• A minimum of 75,000 votes is required for the proposal to be accepted
• Each person is entitled to one vote, and a small fee of 0.1 $SWEAT is charged per vote
• The vote will run for 14 days
• All votes will be weighed equally

The criteria above must be fulfilled for this proposal to be accepted.

Why is there a voting fee?

1. Charging a fee for voting encourages community members to be active and engaged in the voting process.
2. There are different ways for users to earn the required tokens (in this case, $SWEAT) to pay for the voting fee. For example, they can participate in activities Learn & Earn or invite friends to earn tokens.
3. Currently, voting is done by making transactions to a public address. In the future, the plan is to introduce smart contracts that can accept digital signatures as a way to represent votes. This could make the voting process more efficient and secure.

Cast your vote

Open the Sweat Wallet app and navigate to the home screen. There you will see the option to cast your vote. You’ll have until July 21, 2023 to decide how more than 2B SWEAT will be allocated.

Follow along

Check out more of the community contributions in the #governance-proposals channel on Discord and in our Telegram channels.

Let’s chat

As always, the community is at the heart of everything we do. As such, we will have a discussion call on a Twitter Space on Thursday, July 6 at 2 p.m. UTC.

This will allow you to give any suggestions and feedback on the proposal and anything else you’d like to mention around voting before the in-app vote goes live.

In addition, there is a dedicated channel on our Discord for discussing the proposal and asking questions, which we will cover during the call on July 6, 2023.