Klaytn pumps after proposal to reduce block rewards passes

cryptoslatePublished on 2022-10-25Last updated on 2022-10-25

Abstract

Klaytn network’s KLAY is up more than 30% to $0.2055, making it one of the best-performing digital assets this week, according to CryptoSlate data.

Klaytn network’s KLAY is up more than 30% to $0.2055, making it one of the best-performing digital assets this week, according to CryptoSlate data.

Proposal to reduce block rewards

Klaytn Governance Council (GC)has approved a proposal to reduce the network’s block rewards because of the current market situation.

According to the proposal, block rewards would be cut from 9.6 KLAY to 6.4 KLAY per block. Newly minted tokens would also be distributed in a new format, with 50% of it going to the GC, 40% to the Klaytn Growth Fund, and 10% to the Klaytn Improvement Reserve.

Klaytn developers said its intention for the proposal was to “address the volatility currently seen in the macro markets.” The team wrote:

“As a result of the negative situation in the global economy and the crypto market and the increased circulation of KLAY in the Klaytn ecosystem, KLAY price is experiencing a dramatic decrease. We need to respond to the situation by adjusting the amount of minted KLAY.”

Klaytn foundation initiates token buyback

Another catalyst for the positive performance of KLAY is the token buyback initiated by the Klaytn Foundation.

According to a blog post, an abnormal fluctuation was discovered in the token’s on-chain liquidity on Oct. 21, and a buyback was initiated to stabilize the ecosystem. The team stated that Klaytn’s foundation stablecoin reserves would be used to fund the purchase.

Apart from that, the Foundation continued that the purchase would be made via centralized exchanges to minimize volatility, and all repurchased tokens would be burnt.

Klaytn Foundation did not reveal the number of tokens it will buy and what it is spending on the purchase.

Bullish social sentiments

LunarCrush data revealed that social sentiments surrounding the KLAY token are currently high. According to the data, the token’s social mentions rose by 471.7%, and social engagements increased by 717.4% to 6 million.

The asset also currently leads LunarCrush AlternativeRank with leading combined social and market activity.

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