# Burn 50% of OSMO Taker Fees
**URL:** https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456
**Category:** Proposal Discussion
**Tags:** passed
**Created:** [February 5, 2025, 5:59pm UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456 "2025-02-05T17:59:43Z")
**Posts on this page:** 10
**Page:** 1
### Author:  [@JohnnyWyles](https://forum.osmosis.zone/u/JohnnyWyles)
#### Post date: [February 5, 2025, 5:59pm UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/1 "2025-02-05T17:59:43Z")
This proposal seeks to modify the distribution of taker fees collected in OSMO on the Osmosis protocol. Currently, all OSMO taker fees are distributed to stakers. This proposal introduces a burn mechanism, allocating 50% of collected OSMO to a burn address instead of solely distributing it as staking rewards.
## **Background**
A protocol taker fee on all swaps on the Osmosis DEX was initially proposed in [Proposal 530.](https://daodao.zone/dao/osmosis/proposals/530) These consist of a taker fee charged on the input value of swaps above the liquidity spread factor.
The distribution of non-OSMO taker fees was recently changed in [Proposal 881](https://daodao.zone/dao/osmosis/proposals/881) to 45% for stakers. This is converted to OSMO and added to any OSMO collected from the protocol fees before onward distribution.
This OSMO was approved to be distributed entirely to stakers in [Proposal 549](https://daodao.zone/dao/osmosis/proposals/549). This proposal seeks to reallocate this portion of the taker fee to support long-term sustainability.
## **Proposed Change**
This proposal suggests that this distribution of OSMO collected from taker fees should be altered as follows:
- 50% of collected OSMO will continue to be distributed to OSMO stakeholders on a pro-rata basis, subject to validator commission rewards.
- 50% of collected OSMO will be permanently removed from circulation by sending it to the null address, reducing the total supply.
## **Rationale**
This proposed change seeks to achieve the following:
- Benefit to Stakers
- Benefit to Holding
- Supplement ProtoRev burn
- Deflationary Impact on OSMO
## **Implementation**
This proposal will adjust the OSMO taker fee distribution to allocate 50% to stakers and 50% to the community pool. While the community pool does not circulate, temporarily holding OSMO there reduces active supply until it is permanently removed. A monthly governance proposal will be submitted to confirm the burn of accumulated OSMO until an automated solution is implemented in a future software update to burn this portion of the taker fees directly.
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### Author:  [@kill-dill](https://forum.osmosis.zone/u/kill-dill)
#### Post date: [February 6, 2025, 5:19am UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/2 "2025-02-06T05:19:23Z")
A burn, revenue/dividends, and stacking btc in the community pool is good from a lot of different angles. The only way i could see to improve this value accrual mix is to one day take a portion of non-OSMO fees and convert it to BTC dividends for stakers.
A deflationary token that’s backed by BTC and accumulates more of itself and BTC is as good as tokenomics get imo and this would be one step closer.
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### Author:  [@amirkhebre](https://forum.osmosis.zone/u/amirkhebre)
#### Post date: [February 6, 2025, 9:08am UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/3 "2025-02-06T09:08:17Z")
This is one of the best suggestions I’ve seen on the Osmosis community.
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### Author:  [@ApatheticFlux](https://forum.osmosis.zone/u/ApatheticFlux)
#### Post date: [February 6, 2025, 11:34am UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/4 "2025-02-06T11:34:08Z")
@kill-dill I really like this idea, unique and it would take some of the sting out of staking + holding Osmo whilst it under-performs price wise. Plays into the Bitmosis narrative too… 👏
Also great proposal @JohnnyWyles, when is it going up for voting?
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### Author:  [@JohnnyWyles](https://forum.osmosis.zone/u/JohnnyWyles)
#### Post date: [February 6, 2025, 11:52am UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/5 "2025-02-06T11:52:11Z")
I like the idea too - we’ve discussed proposing sending BTC collected by taker fees out to stakers but were worried that this might be more annoying dust levels for users. Eventually the DCA of Bitcoin that the DAO uses 25% of revenue for might be outpaced by any yield within the pool and then this might be a case for redirecting some of that to stakers rather than continuing the full DCA.
On chain next week - this is a larger change so was giving it a week on the forums for feedback.
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### Author:  [@kill-dill](https://forum.osmosis.zone/u/kill-dill)
#### Post date: [February 6, 2025, 6:37pm UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/6 "2025-02-06T18:37:37Z")
Yes right now it wouldnt be a very meaningful amount of BTC. But with more volume and revenue streams coming online in the future it’s certainly something to think about.
Back on topic, diverting the recenue for a burn might rub some the wrong way, but I support it along with reduced inflation.
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### Author:  [@ValarDragon](https://forum.osmosis.zone/u/ValarDragon)
#### Post date: [February 7, 2025, 4:37pm UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/7 "2025-02-07T16:37:40Z")
Thanks for putting this up @JohnnyWyles , I’m quite in favor of this. This will make all osmo holders benefit from the volatility, by lowering whats in supply
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### Author:  [@ApatheticFlux](https://forum.osmosis.zone/u/ApatheticFlux)
#### Post date: [March 3, 2025, 7:48pm UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/8 "2025-03-03T19:48:43Z")
@JohnnyWyles When is the first burn prop going up?
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### Author:  [@JohnnyWyles](https://forum.osmosis.zone/u/JohnnyWyles)
#### Post date: [March 4, 2025, 9:42am UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/9 "2025-03-04T09:42:06Z")
Will be today, only two weeks worth this time but planning on doing this at the start of each month.
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### Author:  [@ApatheticFlux](https://forum.osmosis.zone/u/ApatheticFlux)
#### Post date: [March 4, 2025, 10:13am UTC](https://forum.osmosis.zone/t/burn-50-of-osmo-taker-fees/3456/10 "2025-03-04T10:13:17Z")
Thanks Johnny, may only be two weeks but it’s still a bit of positivity in a dire period 🏅