Layer 1 blockchain The Open Network (TON) has frozen 20% of its circulating supply.
A governance proposal enacted on Wednesday called for a temporary freeze of inactive mining wallets. The TON community voted to suspend miner wallets, that had never made an outgoing transaction, for 48 months to optimize the blockchain’s tokenonmics.
💎 TON's tokenomics optimization
On Feb. 21, on @ton_blockchain the validators will vote on a proposal to optimize tokenomics. If the proposal is accepted, the circulating supply of Toncoin will be reduced by ~20% by freezing it for the next 48 months and then unfreezing it. pic.twitter.com/MXwWjt7YAZ
— Tonstarter (@ton_starter) February 20, 2023
The validator vote that commenced on Feb. 14 ended on Feb. 21, with 91.75% of votes cast in favour of freezing these inactive wallets. Any wallets that became active after the voting period began were excluded from the list.
After the proposal reached consensus, TON froze 171 inactive miner wallets, which amounted to $2.6 billion worth of TON and 20% of its circulating supply. TON rose 5% in the last 24 hours, and was trading at $2.47 at the time of writing.
TON was launched in 2018 by Telegram, which abandoned the project after it ran into trouble with the U.S. Securities and Exchange Commission over its Initial Coin Offering (ICO). It was later taken over by the TON Foundation, who began developing the project in 2020 and made 98.55% of the token’s supply available for mining.
These genesis mining wallets that mined TON directly from Proof-of-Work smart contracts have not made a single outgoing transfer in the coin’s history, which TON believes is a cause of uncertainty for network participants.
Freezing the inactive wallets “will give the TON ecosystem enough time to flourish while providing flexibility to those who may not be aware of these discussions in the community,” said the team.
The project’s 2023 roadmap includes a deflationary mechanism for TON and is already a part of coins permanently blocked in smart contracts like TON Domains (DNS).