LP-0079Finalburndeflationarydaotreasuryprecompile

LP-079: Burn Address Precompiles

Abstract

Defines two burn address precompiles for Lux Network. LUX sent to 0xdead...0001 is permanently burned (deflationary). LUX sent to 0xdead...0002 is routed to the DAO treasury. Transaction base fees are split 50/50 between these two addresses, creating a dual mechanism: deflationary pressure and sustainable DAO funding.

Specification

Burn Addresses

| Address | Name | Behavior |

|---------|------|----------|

| 0x000000000000000000000000000000000000dEa1 | DeadBurn | Tokens are permanently destroyed. totalSupply decreases. |

| 0x000000000000000000000000000000000000dEa2 | DeadTreasury | Tokens are forwarded to the DAO treasury contract. |

Fee Split


Base fee per transaction:
  50% -> DeadBurn (permanent destruction)
  50% -> DeadTreasury (DAO treasury)

Priority fee (tip):
  100% -> Block producer (validator)

Implementation

Both addresses are EVM precompiles that execute on receive():

DeadBurn: Accepts LUX, emits Burned(amount) event, balance is unreachable (no withdrawal function).
DeadTreasury: Accepts LUX, forwards to DAOTreasury contract address (configurable via governance), emits TreasuryDeposit(amount) event.

Deflationary Model

At steady-state transaction volume, the burn rate:

1,000 TPS average, 21,000 gas base, 25 gwei base fee: ~0.26 LUX/second burned = ~8.2M LUX/year
This offsets validator issuance, targeting a net-deflationary supply over time.

Governance

The treasury forwarding address is updatable via DAO governance (LP-085). The burn address is immutable -- no governance can recover burned tokens.

Security Considerations

1. DeadBurn is a true black hole. No admin key, no upgrade path, no recovery. Tokens sent there are gone.

2. DeadTreasury forwarding target is protected by a 7-day timelock on governance changes.

3. The 50/50 split is hardcoded in the fee handler. Changing the ratio requires a network upgrade.

4. EIP-1559-style base fee ensures the split applies to all transactions, not just those with explicit burns.

Reference

| Resource | Location |

|----------|----------|

| DeadBurn precompile | github.com/luxfi/evm/precompile/contracts/deadburn.go |

| DeadTreasury precompile | github.com/luxfi/evm/precompile/contracts/deadtreasury.go |

| Fee handler | github.com/luxfi/evm/core/fee_handler.go |

Copyright

Licensed under the MIT License.