Summary
This RFC is an outline of how I envision we optimize the POP tokenomics based on research I’ve been doing on the DeFi market, specifically on protocols using creative veToken models, or vote-escrow tokens. Some useful resources I used also include the following articles:
POP Tokenomics 2.0
- Stake POP for vePOP
- Choose lock time
- Loyalty Boost rewards
- The higher your vePOP balance, the higher the yield for POP staking and vault LP’s
- Unlock vePOP at any time but with a penalty
- Burn all accrued vePOP tokens (Platypus)
- Or burn depending on time unstaked ie 50% burned if unstaked after 1 year when locked for 2 years
- vePOP accumulates protocol revenue
POP → VC Token general idea:
- Burn POP for VC token for the remainder of 2023, incentivizing the following
- Market orders for POP
- Liquidity Mining POP
- Burning POP, which should also theoretically appreciate POP value due to increased scarcity, benefiting all stakeholders
- VC Token governs VaultCraft
- Tokenomics TBD
- Rollout:
- Inform people VaultCraft will have its own governance starting in 2024
- POP will be required to burn for VC token
- GTM:
- POP Liquidity Mining starts May 1st, 2023
- All miners will be White Listed for VaultCraft in 2024 pro-rata
- In order to mine, you will need to stake POP to mine POP with vaults, meaning you will need POP staked to be eligible for APY boost in POP with vaults
- Burning starts September 1, 2023
- With weekly burns until 2024
- POP Liquidity Mining starts May 1st, 2023
POP Goals:
- Long-term alignment between all stakeholders
- Accumulate community members
- Increase governance activity
- Appreciation to benefit all stakeholders
Notes
- Soft lock-ins - locked staking does not buy loyalty and the word on the street is that it left POP stakers dissatisfied
- Theoretically, adds opportunity cost for stakers with the goal of reducing short-terms fluctuations and inspires people to think long-term
1. Time-based mechanics:
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Stakers accumulate loyalty boosts which award them more rewards/governance right over time
-
Unstaking is allowed anytime, but boost is lost once unstaked
-
Opportunity cost = loss of future revenue & vote weight
-
Additional mechanics can be added to disincentivize unstaking:
- Unstaking penalty/Rage Quit
- Burn all accrued veTokens (Platypus)
- Burn multiplier points (GMX, partial penalty)
- Unstaking windows, 21 days (Prism)
- Reward Vesting - protocols like GMX (esGMX), stakers don’t earn native token, but an escrowed token instead, and they can decide to:
- Keep esGMX for 1 year, automatically staked and earns rewards (autocompounder), more rele
- Vest esGMX, but no rewards are earned (vestor)
- Stakers have to choose between vesting or earning protocol revenue with esGMX
- Unstaking penalty/Rage Quit
- LP’s rewards when claimed are directly converted into Power Tokens
- This should naturally limit the float of circulation, allowing more gradual sell pressure from emissions
- Multiplier
- A user’s individual multiplier is a function of the number of Power Tokens delegated and the $ amount they’ve LP’d
- The multiplier sits on a logarithmic curve
- Beginning of curve has steeper slope allowing user to attain higher multiples while preservice high capital efficiency
- The more tokens, the flatter the curve, making it costlier and less capital efficient for LPs to power up
- Redeeming Power Tokens for the underlying tokens is only possible when the Power Tokens are not currently being used in other modules, ie
- Liquidity mining
- Governance
- Additional modules
- This ensures that tokens can not be “double spent” or “double used.”