In a significant move aimed at boosting its ecosystem and ensuring long-term viability, the Orca (ORCA) Governance Council has submitted a live on-chain proposal to make big changes to the tokenomics of $ORCA and how the protocol’s treasury will be deployed.
The proposed alterations seek to shore up the value of the Orca token across the board, encourage holders to stake their tokens for the long haul, and facilitate the platform’s growth and continued development in a fast-changing DeFi space.
The proposal presents a number of important actions that are intended to serve the dual purpose of benefitting the $ORCA token and its community of holders. These actions all have to do with how the existing treasury can be better employed, and they break down into three broad categories:
1. Using the treasury to undertake strategic buybacks of the $ORCA token: The proposal doesn’t merely call for buybacks to take place. It also describes in some detail why such buybacks are a good idea, and it presents a plan for how to carry them out in a way that’s likely to be effective.
Key Proposals to Strengthen $ORCA’s Ecosystem
1. Weekly ORCA Buybacks and Staking Rewards
A major highlight of the proposal is now the structured buyback program. Under the new measures, 20% of all protocol fees will be directed towards weekly buybacks of $ORCA tokens. Unlike before, when 100% of protocol fees were directed towards liquidity in the OASIS, now with the weekly buyback, we hope to reduce the circulating supply of $ORCA over time. And by doing so, creating some upward price pressure for the token. In an effort to put these buybacks to work, the team has also planned a distribution mechanism for any tokens that are repurchased to be sent to xORCA stakers.
This initiative is a part of the decentralized finance (DeFi) sector. Here, we see a trend growing whereby loyal users and token holders are being rewarded. The way this generally works is that people who contribute to the growth of a network will benefit from whatever success the network enjoys. DeFiers sense this and are acting on it. Added to the buybacks, which as stated could potentially drive demand for $ORCA, are the rewards potentially going to those community members who have, through staking, supported the platform.
2. $10M Treasury Allocation for Opportunistic Buybacks
Besides the weekly buyback mechanism, the Orca Governance Council has proposed to use $10 million from the protocol’s existing treasury to do opportunistic, open-market buybacks of $ORCA. This is meant to give extra support for the token’s market price and to stabilize that value during moments of volatility. With a treasury this size, Orca aims to be a stabilizing force in the market and to use price weakness as an opportunity to strategically repurchase and hold tokens, which could strengthen market confidence.
This proposal aims to create a strategic buffer that gives the $ORCA token an extra layer of security for its market price. Provide that, sir. More ambience buffer in securing the $ORCA token. I put this in because the treasury is investing in buybacks. I throw in here because some signals are good for the treasury to send.
3. $19M Grant for Core Development Team
The proposal has another vital aspect, an allocation of $19 million in USDC from the treasury to fund for over two years the core development team of Orca. This funding will ensure the platform’s continued development and growth, and that it can maintain the ongoing innovation and value it provides to its community. The significant portion of the treasury allocated toward development speaks to the Orca team’s commitment to building a long-term, sustainable ecosystem and a pathway to competing in the rapidly evolving DeFi space.
The crypto industry’s volatility makes it all the more essential to have a development team that is well-financed and not just up-to-par but, rather, top-tier. That is what this move by Orca will ultimately allow: for the company to keep its very best talent and make its next set of developments, most likely in the area of research and something not too far off from development itself, a reality. But it also, obviously, sends a good sign to investors.
4. Burning 25 Million ORCA Tokens
The proposal to change the tokenomics of ORCA includes a plan to incinerate 25 million of the 40 million ORCA tokens remaining in the treasury. This would cut the total circulating supply of the ORCA token by around 25 percent. And while we don’t have a crystal ball, it seems to us that a reduction in supply combined with a buyback program and an uptick in the demand for ORCA coming from staking rewards could lead to an increase in the price of ORCA tokens.
Token burns are an increasingly popular mechanism for reducing supply and supporting the price of tokens in the cryptocurrency market. By removing tokens from circulation, Orca hopes to see an increase in scarcity, which could benefit long-term holders and stakers.
A Bold Move for Long-Term Sustainability
These proposed alterations to Orca’s tokenomics constitute a daring attempt to stabilize the protocol and increase its lifespan. The moves rely on mechanisms that are not unique to Orca but have been seen in other DeFi projects that have fared better than those that don’t. The mechanisms are buybacks, staking rewards, treasury-funded development, and token burns.
For holders of ORCA, the proposal guarantees an even more interactive and remunerative ecosystem, while possibly creating upward price momentum by reducing the supply of tokens and ensuring the future development of the platform. Even as the DeFi space continues to morph, these strategic shifts could make Orca a leader in the ecosystem, delivering even greater community engagement and investor confidence over the long term.
The proposal is presently alive on the chain, with the community closely monitoring it to assess the level of support it is able to secure to push it forward. Should it receive approval, the changes could bring forth a new epoch for Orca, with tokenomics that are far more supportive than what is currently in place, and a pathway into a future that is way more sustainable than the current trajectory.
Disclosure: This is not trading or investment advice. Always do your research before buying any Metaverse crypto coins.