[Tokenomics] The elephant in the room - Serum's FDV

hey I would encourage you to think about what actions you would take, then the community can discuss. You never know, you may spark the discussion that leads to the idea that solves your concerns :slight_smile:


You also see sentences like this We expect a very small percentage of these tokens to actually enter the circulating supply. from the blog (see SRM Unlock. Serum has come a long way since its… | by Project Serum | Medium). Actually, that ‘very small percentage’ doubled the market cap and still 90+% is locked. It could be that the foundation may be stuck with their VCs and partners (who are now all billionaires on paper). They made a mistake with the tokenomics and its very hard to change it. Also a bit odd that Sam never talks about Serum anymore while he was the main evangelist in the early days.


You may find it funny but the latter part of what you said is exactly what i posted on project serum subreddit aswell. It is weird how sam doesn’t market serum at all, his entire focus is on ftt(ftx). Being the confounder and for someone who is so active on social media, he doesn’t talk about srm nearly as much as one would expect him to.

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I am actually doing some brain storming and thinking of ways how this can be achieved. Maybe we can get the dao to change the linear unlock schedule to one where the locked tokens unlock after 5 years or so without anymore tokens getting released into the market before that. If the volume picks up in 5 years then i am sure the remaining tokens can be released as per need and the price will also reflect that

Linear release period changed to fixed i.e: no further release before 5 years from now
Supply burn: the total supply(10bil) can be reduced to lets say 5 bil)

How about we prioritize making Serum a top tier DEX first before spending time on tokenomics? A quick look at the 24H DEX trading volume rankings shows that Serum is still outside the top 20.

Ironing out details of a Volume Incentive Program and a Serum Fee Reduction to bring more traders and volume should be the main focus right now.

We can come back to discussing a supply burn once Serum is considered a top DEX.


Sir what you say is valid and makes sense. Build a solid product and the price will follow.
But don’t you think that once more people are invested in the serum token, the volume on the dex will go up itself? Crypto is a funny world and i think this is how it works.
Token holders, once invested, will want to use the dex itself and this will result in greater volume. Also, there is no reason why what you say and what i propose can’t be done together.
Just my two cents.

I think the purpose of this thread is to focus on solving the problem with the token supply not to continue to pretend like it doesn’t exist or is just a minor issues. In my experience, ignoring significant problems only makes the problem harder to solve in the long run.

Are there actionable steps we can take to move this to an actual proposal? I am not familiar with how this process works. Thanks!!


Yes, it is indeed a significant problem, one that is the biggest criticism of this project for most out there. Building basics is correct but this is also a basic problem. Tokenomics is one of the biggest selling points of any token in the market. Also, like i said before, there is no reason why building the dex and working on tokenomics cant go hand in hand

I have been a long-time hodler of SRM and am happy this topic is getting more discussion. Yes, Lets get Serum volume higher than other Solana DEXs like Orca and Raydium, but tokenomics can’t be ignored.

Serum burns do nothing for the supply. This week 62k SRM was burned. This same rate for the next 6 years, only 19M SRM will be burned. But the max supply of SRM is 10 billion! Why does Serum team celebrate these burns like they do something??

Even if the rate of burn becomes $1M worth of SRM burn per day for the next 6 years, that will only be $2B worth of SRM tokens. When there is a $80B FDV, only 2.5% of supply will be burned. This FDV is higher than Solana’s market cap too, does that even make sense?

Why is there no Serum team member clarifying this matter? Is it because VCs and team have large bags they want to keep with high FDV, like other commenter said? Please, this silence is very weird.

I agree with a large burn like the thread creator said, maybe 75% burn… Even then Serum will be largest project on Solana but now average investors can invest with confidence in upside…


Yeah. I understand. We all agree that Serum tokenomics don’t make sense. My main concern is Serum’s daily volume b/c despite Solana ecosystem blowing up, Serum is not even a top 20 DEX. But, yes, we can still tackle multiple issues at the same time.

1st thing to do is to look at the distribution of the 10B supply. 24% to the team and seed investors so those can’t be touched. Will need clarification on the buckets that make up the 76%. How much has been, or, is set to be given away?

Once this is known, then we’ll know how much of the supply the DAO actually controls.


How do we find out the details about the rest of the 76 percent?

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I hope the Serum team and VCs will clarify the rest 76% along with reasoning for this crazy FDV for the community’s greater benefit. Transparency is in the crypto spirit @adrian @armaniferrante @jhl @JumpCrypto


Serum has governance, but doesn’t have all the features of a dao yet, right?

If it were a DAO, there could be buybacks of SRM into the DAO treasury. It would also make sense for the DAO to hold other projects that build on Serum.

I agree with the burning of 90% + locked supply and would love to hear some thoughts from the team and big investors like @JumpCrypto about this concern.

Also need some explanations from the team about the DAO sent 1 million SRM to some random person’s private account not program account . And why Raydium and Atrix’s proposal are opposed by everyone on the forum (especially by @JumpCrypto) but still passed.

But let’s think about this for a second. So 24% of 10 billion is 2.4 billion. The current circulating supply is 133 million and total supply is around 1 billion. So the team & VCs own 18 times more of what WE ALL own together right now (around 2.5 billion dollars!!!). So much for ‘decentralization’ and ‘DAOs’. It is insane to be honest and not even sure its fixable at this stage. Especially since the team itself never responds on this issue which is the most concerning part.


I think someone from the team should come forward and clear things out. That should be the first step. We can decide what to do next

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A problem is, even if all average Serum users decide for a burn, we have no SRM tokens to vote with compared to insiders!! Look at the pie chart, where is the allocation for the community? It is all for team and VCs. We just have to lobby VCs and hope they will listen to community. Is this now the USA government?

Let us say we make proposal to burn rest of locked supply. Then @JumpCrypto will just vote no with millions of SRM, and that is not mentioning Serum team’s tokens and other VCs. And even if the vote passes somehow, who will own most of the SRM supply now? The 24% given to team and VCs will become 90% + of the total supply. Because team and VCs will never agree to burn their own tokens. So Serum is now even less decentralized…

I think one solution is a very large SRM liquidity mining program by projects like Atrix, Raydium, or other. This way voting power will become distributed to the community. Because burn will not work for decentralization unless insiders also burn their tokens, that they won’t do. But insiders won’t agree with this mining program redistribution to the community, because it will lower SRM price and their voting power…

I think it is very very funny how @JumpCrypto writes PhD thesis to Atrix and Raydium for token programs, but not a single small word the average investors when there is a super clear issue. The Serum team can also take only 10 minutes of their day to respond to the community. If they had thought about real DAO decentralization, they would have a response to us, but no response.

Serum right now not even close to a DAO or decentralized. Its not a pure community project like Mango Markets which had equal allocation for team and community. Projects like Raydium, Orca, Saber, is also so much better than Serum because they distribute token to the community, and also have reasonable FDV. So @AlphaRay can you contribute to this discussion? Serum is an insiders token and they have created this mock “DAO” for some reason or another.

Speaking on this forum will do nothing for the Serum community. 99.9% of Defi community does not check this forum. We need to get the word out to the entire DeFi community!! Serum is the largest Defi project by FDV by a lot, so Defi influencers on twitter and youtube will have a lot of say about this discussion, as Serum DAO is right now the least decentralized DAO to exist. We need to organize the Serum community and spread this forum thread to start very public discussion!

@daffy @mschneider can you assist by tweeting this thread to the Solana community? Mango Markets is the best decentralized DAO and it will be good for everyone if Serum realizes they also need to become decentralized for the token to have any value in the future. Maybe we can also contact this Henry_E__ user on twitter from the @garay screenshot. I say we can make a telegram channel to organize and also message Defi accounts on twitter and spread this thread in Solana project discords.

I am putting all of this effort into this forum since I am a long-time SRM hodler. I believe Serum is a good project and so does everyone here. But the lack of decentralization and also no insider communication is a very bad sign for the future of the Serum community. It looks very bad for Serum and all Solana projects. So It is up to us the community to get the word out!!


While i agree with what you have said, I don’t think it is right to point fingers before hearing the other side’s perspective aswell. However, i do feel that at this point in time, this topic does feel like it is being neglected and ignored on purpose. I am sure someone from the team can take out some time to address this growing concern.