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Fantom Community Gives Green Light for the Creation of a Vault

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Cryptocurrency project Fantom (FTM) recently held a community vote that proposed the creation of an Ecosystem Support Vault. The vote passed, and the idea was officially adopted by the Fantom community.

The goal is to build a Vault and use it for storing funds that users are paying in order to have their transactions processed. So far, these funds were simply burnt, meaning that they were sent to a wallet that no one can access and pull the money from. Essentially, the funds were removed from circulation forever. However, that will now change, as the proposal suggested that these funds should be used for supporting and financing new projects within the Fantom ecosystem, and the community accepted it.

The voting originally started at the start of this month, on July 5th. After weeks of voting and debating, the idea collected the majority of votes in favor, marking a one-sided win. In total, 99.75% of the community that voted on the proposal voted in favor of it. Technically speaking, the voting is not yet done, as it is supposed to be open until October 3rd.

However, one of the rules involving the voting process says that the process can be concluded early if the vote crosses the 55% quorum requirement. With the requirement now being met, the voting is finished, and Fantom will start diverting 10% of transaction fees to the Ecosystem Support Vault.

How does the burning mechanism work?

Until now, 30% of each transaction fee was burnt, but now, with one-third redirected to the Vault, the burnt amount will drop to only 20% of the total fee. The rest will continue to be given to validators as a reward. In other words, there will still be a considerable portion that will continue to leave the circulation, only this time, it will be one-fifth of the fee instead of one-third.

Of course, that means that the amount of FTM that will be destroyed per year will be reduced. However, it also means that the community will now be able to provide funding for new projects without having to pay any additional money to make it possible. With the money to support new projects now stored in the Vault, Fantom is likely to see a significant increase in the development of high-quality projects and potentially the improvement of existing ones, depending on how exactly the money ends up being used.

Furthermore, the community members who participate in the voting process will now likely also have to vote on decisions to offer trants, support projects, and alike. The continuous use of the Fantom network will make keep funding the Vault automatically, and the only thing left to decide is what the funds will be spent on.

To learn more visit our Investing in Fantom guide.

Ali is a freelance writer covering the cryptocurrency markets and the blockchain industry. He has 8 years of experience writing about cryptocurrencies, technology, and trading. His work can be found in various high-profile investment sites including CCN, Capital.com, Bitcoinist, and NewsBTC.

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