TL;DR — We propose new protection for minting SNS tokens, reducing the risks while keeping the ability to mint for SNSs that require this feature.
Background
There has been a prior discussion on setting SNS token minting limits: https://forum.dfinity.org/t/minting-limits-detailed-design/28251. However, the proposed plan was not implemented due to some concerns raised by the community and other priorities.
In light of the upcoming SNS Liquidity Pools feature, it is a good time to raise the question again on what SNS token minting restrictions would make the most sense, since minting tokens can be disruptive, e.g., for token holders who might not realize soon enough that the token supply increased (which would otherwise affect their expectation for a fair price).
Proposed changes
We propose to restrict minting SNS tokens in two complementary ways.
- Limit the amount that can be minted via a single proposal to 50% of the total token supply.
- Restrict the destination accounts to those of SNS-controlled canisters,including the SNS treasury and accounts of SNS dapp canisters.
Rationale
- The main critique of the original plan to limit SNS token minting was about the capping in terms of the absolute amount. In particular, it was pointed out by @skilesare that a DAO should be able to mint at least as much as it manages to burn. In contrast, having a relative bound for minting at half the total supply seems sufficiently generous to allow for common use cases.
- The second requirement ensures that newly minted tokens are controlled and further distributed by a smart contract under the DAO’s control, which makes it easier for SNS users to decide whether minting proposals are used as intended.
Next steps
We would like to collect feedback on this proposal and make a decision how to move forward with limiting SNS token minting soon. Please let us know your questions or concerns!