Announcing the Outcome of Swarm’s Bonding Curve Vote

Les jeux sont faits: the Swarm community has decided to shut down the bonding curve. The voting held on Snapshot regarding the future of the Swarm bonding curve started on March 28 concluded on April 25 at 11:59 PM UTC.

Vote overview:

The bonding curve is a mathematical model that determines the price of a token based on its supply. It functions like an automated vending machine, where tokens can be acquired or returned in exchange for DAI held in reserve by the smart contract.

The bonding curve mechanism has been fundamental to the design framework of the Swarm network, playing a vital role in maintaining liquidity and ensuring clear pricing. Three years after its initial deployment, and with the token now extensively distributed, concerns about the continuing relevance of this initial design had surfaced.

The decision on whether to retain or remove the bonding curve mechanism was thus placed in the hands of the community, reinforcing the network’s path towards full decentralisation.

With only a kill switch available, the community had to decide whether to either maintain the current mechanism or completely deactivate (kill) the bonding curve.

Participation

The matter of the bonding curve and its vote was widely discussed amongst the community and experts in the field, with Zoom debates, Twitter Spaces, an AMA, blog posts, and most notably, constant participation in the debate on Discord. The engagement metrics reflect this passionate participation from members of the community. Below, you can find some KPIs:

Eligible wallets with voting power ≥1: 37,881

Eligible wallets that voted: 21.02%

Eligible voting power used in voting: 9.17%

(Please note that eligible wallets are those that held at least 10 BZZ at the time of the snapshot. Wallets associated with the Swarm Foundation, Swarm Association, and Centralised Exchanges (CEX) were excluded from voting to maintain impartiality.)

These high participation rates highlight the active involvement of community members in pivotal governance decisions.

Voting Results:

Token holders had the possibility to vote either to maintain or remove the bonding curve, and the community has made a clear decision:

Votes to Remove the bonding curve: 24K BZZ (87.07%)

Votes to Maintain the bonding curve: 3.6K BZZ (12.93%)

The REMOVE option won by a large majority. This result reflects the community’s preference for transitioning to a more standardised, market-based mechanism for acquiring and selling BZZ tokens.

Implications of the Vote:

As a result of the vote, the Swarm Foundation will proceed with the deactivation of the bonding curve. The following changes will take effect:

Deactivation of the Bonding Curve: the bonding curve smart contract will be shut down on May 4th.

Funds: Remaining DAI within the smart contract will become inaccessible.

Minting of BZZ: the minting of new BZZ tokens will no longer be possible, and the supply will therefore remain fixed. BZZ will continue to be traded on third-party markets, including centralised and decentralised exchanges.

Continued engagement: We will provide comprehensive information and support Swarm’s community to ensure a smooth transition.

Swarm Foundation’s Commitment:

The Swarm Foundation rejoice at the active participation and decisive contributions of community members and remains dedicated to supporting a decentralised governance of the Swarm network.

Reflection on the Process and more:

For further details on the voting results and forthcoming initiatives, please visit the official communications on the Swarm Foundation Blog and join the ongoing discussions on Discord to engage with the community and the Foundation team.

The Swarm Foundation looks forward to advancing together with community toward a more flexible and resilient future. Thank you to all who participated in this critical vote. Your involvement is instrumental in shaping the governance and success of the Swarm network.

Together, we continue to build a robust and decentralised future.

Let us proceed together apace.