The latest Filecoin community destruction proposal, reducing circulation, pulling up prices, and the ecosystem can prosper

Filecoin is a thriving ecosystem with an exciting growth trajectory in the future. However, FIL's current token economics, especially its high FDV relative to MC, is considered challenging for new investors to enter the ecosystem.

· In order to make Filecoin more consistent with the way the market evaluates the attractiveness of encrypted networks, we propose to burn 300M FIL mining reserves (15% of the 2B maximum supply). From the perspective of token holders, burning will optically reduce excessive dilution and improve the stability of Filecoin's token economy.

Fully diluted value (FDV) is a common metric for the market to evaluate the network and understand how much upcoming dilution token holders may incur - FDV is measured by inferring the market value of the network if the entire theoretical token supply were to be released.

Market capitalization (MC) is a measure of the total value of a crypto asset based on the current price and current circulating supply of the crypto asset (rather than the maximum, future total supply). A large gap between FDV and MC can be a red flag as it signals to investors that their token holdings will be diluted with inflation as the current circulating supply expands to its maximum future total supply.

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Thus, a low MC to FDV ratio - while it does not provide any information about future token inflation rates - may dissuade investors from considering investing in the underlying crypto asset in the first place. We note that there is a positive correlation between the MC/FDV ratio and token price returns over different time periods - which may provide empirical support for our hypothesis of investor bias against low MC/FDV tokens.

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