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Burning for Long-Term Growth | Saying Goodbye to Billions of Tokens

February 7, 2024
Once upon a time, Gala burned $660M of its network token, GALA, in the name of ecosystem sustainability.
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As the original anonymous forefather of web3 himself showed us with the revolutionary Bitcoin Whitepaper on October 31st, 2008, supply is important in the world of digital currency. Satoshi Nakamoto is still considered the most brilliant creator and foremost innovator in the web3 world, even after more than 15 years of blockchain evolution that has given way to over a thousand different blockchains and tens of thousands of different altcoins. This is because he outlined and described the most important aspects of a successful peer-to-peer digital currency.

For Bitcoin, this is a halving year, meaning that block production rewards for miners will be reduced by half. Technically, this halving occurs every 210,000 blocks. The  April of 2024 halving is the 4th Bitcoin halving, taking place once 840,000 total blocks have been created on the blockchain.

$GALA’s Supply

As a gas and utility token for the rapidly growing GalaChain ecosystem, the $GALA’s supply is regulated in an entirely different way. Still, similar to BTC, the purpose is to ensure long term sustainability of that token and its ecosystems as they grow. Also similar to the Bitcoin blockchain, $GALA utilizes a halving mechanic, but the halving is dynamic based on totalSupply rather than block height. Here’s how it’s written in the recently released Gala Ecosystem Blueprint (Consult that document for more details):

“The maximum total supply cap for $GALA is set at 50 Billion tokens. The daily emission rate of $GALA is dynamically adjusted based on the Circulating Supply. This Circulating Supply is subject to decrease when $GALA is used as gas within the Gala ecosystem or when it’s expended in ecosystem-supportive activities, like purchasing specific NFTs. 

The current emission rate of $GALA is determined by a variable daily emission formula, which takes into account the totalSupply of $GALA on the blockchain. An increase in the totalSupply (indicating more $GALA emission than burning) results in a reduced emission rate. Conversely, when certain milestones in totalSupply are achieved, a halving event is triggered automatically. 

If the totalSupply dips below a previously reached halving point, the emission rate may increase to align with demand. This interplay between emission rate adjustment and totalSupply reduction establishes a dynamic, responsive supply system. This system not only ensures long-term ecosystem rewards for the Founder’s Nodes, instrumental in supporting the ecosystem, but also imposes a balancing effect on the totalSupply, exerting a downward pressure on the token quantity in circulation.”

The Big Burn

In mid May of 2023, a powerful decision was made by Gala’s leaders. In a massive commitment to community trust, a total of about $620 million in $GALA was burned from company owned wallets, and a new vision was put forward regarding the future supply regulation of the ecosystem token.

You’ll find more information about this event from when it happened in THIS BLOG. Essentially this big $GALA bonfire went alongside a pledge to our community that we’re in this together, and for the long haul. With so many untrustworthy characters in this space who have betrayed their communities’ trust, we couldn’t allow our own beloved community to remain uncertain about our loyalties.

With the yearly $GALA Founder’s reward halving looming on the horizon at the time (according to the previous supply tokenomics of $GALA), we implemented the new dynamic supply-based halving described above just in time for Founder’s Node rewards to increase, rather than decrease.

At the same time, we committed to a new primary purpose for the $GALA token, as the gas token for the ecosystem. GALA is burned from totalSupply whenever it is used as gas on the blockchain. 

Keep in mind that we’ve only just begun to onboard external developers to GalaChain, which is finally ready for massive growth. While the projects and products on GalaChain are set to increase in number, the number of Founder’s Nodes (max 50,000) will not increase, and the max supply of $GALA will never increase (max 50B). As you may have noticed, we’ve been busy releasing tools to make it easier than ever for new developers to join our ecosystem and develop their own projects on our versatile L1.

For you earliest adopters, it may seem like a long journey looking back, but we’re here to remind you that this thing is just getting started. Before you know it, we’ll be the first billion user blockchain in the world, and that too will just be a single chapter of the story. Thanks for the part you’re playing in this adventure.