I propose adding a complete burn of all network fees to the network upgrade protocol for both Tezos and Etherlink.
The amount of XTZ burned can be used as a guideline for how much the network breaks even. The network will only break even if the burn rate equals or exceeds the inflation rate.
In addition to sunsetting liquidity baking, an excellent idea!
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My vision of how it should be. Bakers receive rewards solely from the protocol, and users burn XTZ when making transactions, thereby reducing or completely eliminating inflation, with the potential to make the network deflationary.
The task for TF and the community is to figure out how to attract users and encourage them to make large numbers of transactions. With the current inflation rate and low transaction fees (0.001-0.002 xtz), the network needs to handle approximately 25 billion transactions per year to be self-sustaining. 
Our bakery doesn’t think this is necessary for the future of tezos, it’s shooting in the dark for an attempted economic benefit when in reality the economics of a coin are determined by macro market forces not minor gas fee burn differences
Right now, the XTZ price is based on faith, which is dwindling over time.
Considering that fees are not burned, how can you imagine organic, stable growth in the price of a network coin?
Even if the number of users grows, why should the XTZ price rise? All the XTZ that people buy to pay network fees will be dumped back into the market by bakers, along with the inflation coins they receive for baking.
Think of the blockchain network as a service that must be paid. Bakers maintain the network, and therefore they should receive “money” for their work.
There are two ways bakers should receive coins for their work:
- Only from network fees
- Only from the inflation coins issued by the protocol, but the network fees should be burned.
I also want to point out that you must understand that the value of all cryptocurrency right now is based solely on faith, not on a working business model.
Why is Bitcoin so successful? It’s the first coin with a secret creator, and everyone knows that the supply of BTC is limited, and that coins will become scarce due to human factor. Everyone likes to compare Bitcoin to gold.
As for inflationary coins, their growth is driven by some incomprehensible belief that the price will increase. Does anyone ask why it should increase?
Because someone is buying and holding it? Why should they do that? To hold a coin, there must be a belief that it will increase in value, and why should it increase in value?
Well, I don’t think you should rely on that. It’s some kind of casino, based on a Ponzi scheme.
Totally agree with you, KDprogs. And I want to take it further.
On fee burning:
The comparison with other blockchains is clear. Ethereum burns its base fee via EIP-1559, Avalanche burns 100% of fees, Solana burns 50%. Tezos is the only major network with no structural link between network usage and token value. Fees going to Bakers have created zero upward pressure on XTZ, the numbers prove it.
With TezosX and its rollups using XTZ as gas, the opportunity is right there: integrate fee burning into the protocol and make Tezos deflationary based on usage. Your formula is perfect and the burn rate as the network’s break-even indicator.
On how to generate those transactions:
You raise the real problem: it takes massive transaction volume for the burn to be meaningful. So the real question becomes: how do you generate it?
Look at what NEAR did with NEAR Intents: a unique product, built around NEAR’s core differentiator, that generates native volume and burns a portion of every transaction. Result — over $13 billion in cumulative volume across 35 chains. That’s not communication, that’s a product.
Tezos has the exact same potential with an asset nobody else has: its native on-chain governance, formally verified, upgradeable without a hard fork. Nomadic Labs has over 40 PhDs in computer science — the brainpower is there.
On where we go from here:
Cosmos didn’t wait for things to fix themselves. They opened a public working group to rethink ATOM’s tokenomics from the ground up, with the whole community involved. That debate was messy, controversial, and slow but it produced real proposals and real change.
Tezos needs the same thing. A structured, open working group dedicated to tokenomics and product differentiation, before it’s too late. We have the governance tools to do it on-chain. The irony would be not using them.
Burn without adoption is not enough. Adoption without burn is not enough. A unique product coupled with a burn mechanism,that’s a paradigm shift. But none of this happens without an honest, community-wide conversation first.
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Tezos X fee model is based on EIP-1559. It’s one of the very few things they bothered to document. Not the mountain of security footguns. Those you’ll have to find out about on your own later.
We have reviewed the relevant information and are not opposed to changing the economic model on Tezos. We’re also planning to become a multi-chain validator to also support the TRON ecosystem. Thanks for initiating this discussion and opening our eyes to other models
