Hi Ethereum Magicians! Forgive me if this has been discussed before, but I wanted to surface a conversation on tokens to help better the Ethereum space.
With Lens Protocol, Disco, Account Abstraction, and innovations happening in the user experience on Ethereum, a new wave of web3 social is emerging. I think an important issue to address immediately is the possibility for bad actors to spam tokens to wallet addresses that hold significant value for members. As we use these decentralized identities in our day to day lives, we should have the right or be rewarded for removing unwanted token transfers into our wallet.
The solution / EIP I’m proposing is outlined below. Please let me know your thoughts!
EIP: <to be assigned> Title: Introducing a Token Minting Fee and Burn Incentive Author: <Your name> Type: Standards Track Category: ERC Status: Draft Created: March 4th, 2023 Requires: <EIP numbers> Replaces: <EIP numbers>
This EIP proposes the introduction of a fee for minting new tokens on the Ethereum chain. The fee would be set at an amount that is sufficient to cover the gas cost of burning a token transaction. Any additional amount above the gas cost would be rewarded to the wallet holder that burns the token. The goal of this proposal is to demotivate spam and incentivize burning unwanted tokens, which can reduce the number of unnecessary tokens on the chain and improve its overall efficiency.
The Ethereum chain has seen a significant increase in the number of tokens being created, many of which are of low quality and have no real use case. This has led to an increase in spam and clutter on the chain, making it more difficult for users to find legitimate projects and transactions. By introducing a fee for minting tokens, we can discourage the creation of low-quality tokens and incentivize token holders to burn unwanted tokens, which can help to reduce the clutter on the chain and improve its overall performance.
This EIP proposes the introduction of a fee for minting new tokens on the Ethereum chain. The fee would be set at an amount that is sufficient to cover the gas cost of burning a token transaction. Any additional amount above the gas cost would be rewarded to the wallet holder that burns the token. The fee would be paid in ETH or any other ERC-20 token as determined by the token issuer.
Token issuers would be required to set the minting fee for their token at the time of creation. The fee would be displayed on the token contract and would be visible to all users. The fee would be deducted automatically from the token issuer’s account at the time of minting.
Token holders would be able to burn unwanted tokens by sending them to a designated address. The address would be specified in the token contract and would be publicly visible. When a token is burned, the wallet holder would receive a reward equal to the amount of the minting fee, minus the gas cost of the transaction.
Introducing a fee for minting tokens can help to reduce the number of low-quality tokens on the Ethereum chain and incentivize token holders to burn unwanted tokens. This can lead to a more efficient and streamlined chain, making it easier for users to find legitimate projects and transactions.
By setting the fee at a level that covers the gas cost of burning a token transaction, we can ensure that token issuers are not discouraged from creating legitimate tokens. At the same time, by rewarding token holders for burning unwanted tokens, we can incentivize them to take an active role in maintaining the health and efficiency of the chain.
This proposal does not introduce any security risks to the Ethereum chain. The fee for minting tokens would be paid in ETH or any other ERC-20 token, and would be deducted automatically from the token issuer’s account at the time of minting. The reward for burning tokens would also be paid in the same currency, and would be sent to the wallet holder’s address upon completion of the burn transaction.
- Ethereum Improvement Proposal 20 (ERC-20): Token Standard
- Ethereum Improvement Proposal 721 (ERC-721): Non-Fungible Token Standard