Thoughts on SecretSwap GOV Token

I was reading about the Defi Money Market (DMM) being shut down by the SEC yesterday. I can’t help but think this is the first of many. I’m comfortable with the SCRT token based on the history of the token, the former SEC involvement with Enigma, the current distribution, etc.

Creating an entirely new token however would mean navigating those waters again. The democratic nature of its distribution helps, but fundamentally this will create a new unit of value out of thin air which seems to be in the crosshairs now.

This got me thinking; If the GOV token is meant to ensure responsible governance of the exchange, why should it be traded around like a stock or speculative asset? The value of the coin should only be related to the value people put on proper governance of the exchange, not crypto speculation.

So here’s my proposal. Is there a way to burn any tokens that aren’t being used to vote on governance issues? I’m thinking not, and I’m sure that’s a controversial idea, but for the health of the network and AMM would this not produce optimal governance?

I’m not a legal academic, but looking at what happened with DMM, it seems like they were tokenizing “real-world” (whatever that means) assets. I would assume that’s what the SEC had an issue with, and not the trading of crypto assets itself.

If the SEC came after Uniswap, then that would probably be a reason to worry, but we have yet to see that.

And that’s fair, but nonetheless, should the goal of a Governance token to be valuable and speculated on by parties that have no interest in participating in governance?

The goal of the governance token is in its name. Whether there’s speculation behind is because there’s an assumption that the platform is valuable and in any case would be a secondary effect.

Having an open market for the governance token also allows for the entry/exit of participants giving anyone new a fair chance to get in without any sort of discrimination, which to me is basic in a permissionless system.

You seem to suggest a governance token is being created to print money, but that just seems like your own assumption. Burning tokens is nothing short of a dictatorship as well IMO.

I don’t see how it’s a dictatorship. There are rules being set on how they will be distributed, how is that any different than establishing rules about the expectations of ownership? There would be nothing that would keep someone from selling their tokens if they want to exit governance, and any burn would be redistributed in an equitable way (for example, in the same manner that they are being distributed to start with).

Expectations of ownership is basically telling people what to do with what belongs to them.

Rules of distribution are precisely about giving ownership to another party.

Both are massively different imo.

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