OSMO has stopped minting new tokens, and 51.9 million have been frozen
$BTC $ETH
The token issuance has stopped.
Starting early this morning, Osmosis staking rewards will no longer come from minting new tokens; instead, they’ll be funded by protocol revenue. ChainCatcher put it this way: “Ending OSMO token issuance and shifting the source of staking rewards from newly issued tokens to protocol revenue.” Put simply, it’s switching from printing money to pay salaries to earning money to pay salaries.
As part of the same set of changes, around 51.9 million pre-minted developer tokens have been frozen, and the roughly 2 percentage points of annualized staking yield that had been supported by new issuance have been eliminated.
Based on the data, this is mildly bullish for OSMO in the short term and neutral for the broader market. There will be less new issuance on the supply side, and pre-minted tokens are no longer expected to enter circulation, meaning selling pressure has genuinely eased.
The downside is on the demand side: stakers are losing 2 percentage points of yield. If the amount staked falls faster than supply contracts, the price may not respond favorably. The next two things to watch are changes in OSMO’s staking rate and whether protocol revenue can sustain the remaining rewards.
$BTC $ETH
The token issuance has stopped.
Starting early this morning, Osmosis staking rewards will no longer come from minting new tokens; instead, they’ll be funded by protocol revenue. ChainCatcher put it this way: “Ending OSMO token issuance and shifting the source of staking rewards from newly issued tokens to protocol revenue.” Put simply, it’s switching from printing money to pay salaries to earning money to pay salaries.
As part of the same set of changes, around 51.9 million pre-minted developer tokens have been frozen, and the roughly 2 percentage points of annualized staking yield that had been supported by new issuance have been eliminated.
Based on the data, this is mildly bullish for OSMO in the short term and neutral for the broader market. There will be less new issuance on the supply side, and pre-minted tokens are no longer expected to enter circulation, meaning selling pressure has genuinely eased.
The downside is on the demand side: stakers are losing 2 percentage points of yield. If the amount staked falls faster than supply contracts, the price may not respond favorably. The next two things to watch are changes in OSMO’s staking rate and whether protocol revenue can sustain the remaining rewards.