What Is Pay-by-Burn? BitBender Explains GALA’s New Mechanism

BitBender opines that people’s perception of basic concepts was a major factor in the confusing sentiments around the Pay-by-Burn mechanism.

Gala games logo burning hands coming out with money symbolizing pay-by-burn.
  • Last week, Gala announced the Pay-by-Burn mechanism to incentivize founder node operators to run their nodes for longer. 
  • The mechanism proposes burning all the GALA used in purchases on the platform for Q1 2023. 
  • Jason ‘BitBender’ Brink, Gala’s President of Blockchain, shared a detailed synopsis of the mechanism on Gala’s official Discord. 
  • Also, does BitBender think the Crypto Winter is over?

Following the news that Gala would work to implement a new “Pay-by-Burn” mechanism, the community was, ironically, set alight with questions.

On January 13th, Gala’s President of Blockchain shared an announcement explaining the Pay-by-Burn mechanism. However, BitBinder’s explanation was met with further confusion, as users questioned the burning and minting processes involved. 


In response to the confusion, BitBender clarified the Pay-by-Burn mechanism with an analogy using plants, water, and flasks. However, despite his efforts, BitBender’s explanation gave rise to more questions than answers.

To  fully comprehend the Pay-by-Burn mechanism, DailyCoin spoke with BitBender in an exclusive interview to better understand the mechanism, learn about Gala’s short-term and long-term goals, and more.

BitBender opined that the crypto community typically has many misconceptions surrounding token burns. 

He emphasized:


“When a contract burns tokens, it cuts off tokens from the total supply, or the circulating supply, and not the max supply as most people misconceive,”

Token burning is a process that necessitates using a burn wallet address—a “dead” address with no known private keys, effectively making it inaccessible.

During the process, coins are removed from the circulating supply, either by the issuer or the community via incentives. These tokens are sent to the designated burn address, where they become inaccessible and, therefore, unusable. Typically, this mechanism creates scarcity as part of a deflationary model.

Pay-by-Burn Explained by the Expert

Speaking about Gala Games’ new mechanism, BitBender explained:

Gala’s Pay-by-Burn burn mechanism is similar to the one used in Ethereum,” he began, “the GALA collected from purchases on the platform will be sent to a burn address for it to be never used again.”

One aspect of the innovation that had flummoxed the community was the intention behind it, and BitBender had the answer:

The quantity of the GALA burnt would be distributed to GALA founder nodes to incentivize owners to keep running nodes for longer.”

Under the current Gala model, daily rewards for founder nodes are halved annually in July. Therefore the rewards for running a founder node 20 years in the future will have significantly decreased and may no longer be an incentive for a node operator. This presents the ecosystem with a long-term sustainability issue.

The Pay-by-Burn mechanism is Gala’s answer. By distributing rewards over time via the ongoing, sustainable process, node operators will also be incentivized to maintain their nodes.

What’s Next for Gala?

The Pay-by-Burn mechanism is expected to play a significant role in the ecosystem. When asked about Gala’s short-term and long-term goals, Bitbender shared: 

“Gala is simultaneously working on a range of exciting projects, which will be announced soon in a roadmap update.”

The Blockchain President added:

“This crypto winter might not be like other crypto winters. While prices have decreased, I believe that projects in the web3 space have continually been building, which is why I think the winter is over.”

On the Flipside

  • By 2046, Founder nodes’ rewards are projected to decrease to 0.5 GALA. However, with the integration of the Pay-by-Burn mechanism, node rewards are expected to be 186 GALA by then.

Why You Should Care

As blockchain sectors continue to grow, the issue of sustainability will become an increasingly prominent discussion. Gala’s new mechanism proves that the platform is willing to innovate and find new ways to reward its users while strengthening its foundation to enhance the longevity of its mechanisms. 

Read about Gala’s recent community reactions:

GALA CEO Responds to Drama as Crypto Twitter Reacts

This article is for information purposes only and should not be considered trading or investment advice. Nothing herein shall be construed as financial, legal, or tax advice. Trading forex, cryptocurrencies, and CFDs pose a considerable risk of loss.

Insha Zia

Insha Zia is a senior journalist at DailyCoin covering crypto developments, especially in the Cardano ecosystem. With a Bachelor of Science in Computer Systems Engineering, he delivers high-quality articles with his technical background and expertise in data analysis and programming languages, aiming to educate and inform readers accurately, transparently, and engagingly. Insha believes education can drive mass adoption of the crypto space, and he is committed to giving DailyCoin readers a better understanding of the technology.