Prioritize Burn over Accumulation from Taker Fees

This proposal adjusts the distribution of taker fees by:

• Increasing the buyback allocation of non-OSMO taker fees from 45% to 75%
• Increasing the burn allocation of OSMO taker fees from 50% to 75%.

These changes aim to enhance token value accrual and align with the long-term sustainability goals of the Osmosis ecosystem.

Current Parameters

Taker fee collection occurs on the token that enters a trade; non-OSMO tokens are currently split:

• 55% Accumulation in the community pool
• 45% Buy back OSMO This split was last adjusted in Proposal 881 to support the accumulation of BTC liquidity.

OSMO collections, both directly and via buyback, are then split

• 50% Distributed to Stakers
• 50% Burned

This parameter was last adjusted in Proposal 903 as a burn mechanism.

Proposed Parameters

This proposal would:

1. Change the non-OSMO taker fee split from 55% Accumulate / 45% Buyback → 25% Accumulate / 75% Buyback
2. Change the OSMO fee split from 50% Distribute / 50% Burn → 30% Distribute / 70% Burn

These changes increase the share of taker fees used for market purchases of OSMO, increasing direct buy-side pressure. The reduction in community-pool accumulation reflects a view that reserves are growing sufficient for ongoing strategic use.

The increased burn share reduces token supply at a faster rate while preserving meaningful staker rewards from revenue.

Impact

This calculation assumes that the OSMO portion of taker fees is 25%, which is currently typical but may change over time.

Forum Post: https://forum.osmosis.zone/t/prioritize-burn-over-accumulation-from-taker-fees/3777