Lisk DAO Votes on 25% Token Burn to Boost Value

The Lisk ecosystem is at a critical juncture as the Lisk DAO prepares for a significant governance vote scheduled for July 1st. The proposal under consideration is whether to burn 100 million LSK tokens currently held in the DAO treasury. If approved, this action would immediately reduce the total supply by 25%, from 400 million to 300 million LSK, a move with substantial implications for the token’s long-term value and the ecosystem’s funding capabilities.

The 100 million LSK in question is part of a 145 million token tranche created during Lisk’s transition to Ethereum. While 45 million of these tokens are already set to vest over a three-year period, the remaining 100 million await a final verdict from the community. Proponents of the burn argue that reducing the token supply will increase scarcity, thereby strengthening market confidence and potentially driving up the price per token. This, they believe, will position Lisk more competitively within the broader altcoin landscape.

Opponents of the burn, however, caution that permanently removing these funds could hinder the project’s future development. Under the current vesting plan, the 100 million LSK would be released gradually between 2027 and 2033—15 million tokens each year—to support grants, liquidity programs, and ecosystem expansion. Critics of the burn emphasize that the treasury is only used via governance-approved proposals, so fears of unchecked inflation are likely overstated.

Should the burn be approved, the impact would be immediate: a 25% cut in total supply. While this could lead to short-term price appreciation, some experts caution that limiting developer incentives and community grants could hurt Lisk’s ability to attract new talent and build out a vibrant dApp ecosystem. If the proposal is rejected, the tokens will remain under vesting restrictions but could introduce a new set of risks. Gradual releases during weak market cycles might create unwanted selling pressure, affecting token stability. However, future votes could still authorize partial or full burns of the vesting tokens—allowing the DAO to take a more dynamic, hybrid approach.

The upcoming vote is about more than just numbers. It’s a choice between prioritizing scarcity-driven valuation and preserving the financial runway for long-term innovation. Either path will define how Lisk positions itself in an increasingly competitive blockchain landscape. The debate has intensified across community channels, with intense discussions on the potential outcomes and implications of the vote. The Lisk community is closely monitoring this pivotal moment, as the decision will shape the future trajectory of the Lisk ecosystem.