DAO (decentralized autonomous organization) is one of the core use-cases presented by the new version of DMD diamond blockchain – the DMDv4. One among many ways that DAO-based projects on top of our blockchain can give back to the DMD diamond ecosystem is via the softburn mechanics approach – through purchasing and facilitating the transfer of DMD diamond coins into the reinsert pot.
DMD diamond coins that ended up in the reinsert pot are soft-burned. Basically, half of the abandoned DMD diamond coins staked on inactive validator nodes, fund the reinsert pot. The coins are accessible to no one, although not lost, but are slowly rolled out as bonus rewards to DMD diamond blockchain validators and stakers.
It’s noteworthy that – DMD diamond coins can only be recovered into the reinsert pot (and subsequently soft-burned) under four situations:
1. When it falls under DAO proposal and transaction fees.
2. If DMDv3 coin holders didn’t claim their equivalent DMDv4 coins within five years of DMDv4 launch. (after 3/6/60 months, a part of not claimed coins is moved into reinsert pot and DAO governance pot – as the claimable DMD v3 snapshot balance is reduced (100% for month 0-3, 75% for month 3-6, 50% for month 7-60, 0% after month 60).
3. When validators are inactive for ten (10) years. The rule is – validator nodes are closed on the DMD diamond ecosystem when inactive for ten years. So when a DMD coin holder stakes on top of a validator who is inactive for nine years, their stake can only be reclaimed one year later. Exactly not advisable to stake coins on inactive validator candidates.
4. Voluntary transfer of DMD diamond coins. For example, projects on top of our blockchain can use DMD diamond blockchain’s softburn mechanics as part of their service fees. Typical example is the NFT project that BlockServ is bringing forward – where DMD are softborn in the creation process of unique NFTs
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