Emissions Simplification

The following proposal can be voted on here:
https://snapshot.org/#/apy.eth/proposal/0x4248d33a7a9cc59d990325e3260e86db6eae7364a9d64049918ae8ec66eea35a

Summary

If passed, this proposal will result in the removal of the vesting period of newly emitted tokens and reduce the weekly emissions rate to 81,700 for Liquidity Mining and 27,233 for Liquidity Provider Rewards.

Details

Since launch, the platform utilized APY token emissions to engender protocol growth and engagement. The tokens adhered to a vesting schedule of 3.89% per week. With the launch of APY.Finance Alpha and platform generated yields on TVL, vested tokens emissions are no longer the core mechanism by which the platform generates yield.

To reflect the current conditions, this proposal seeks to remove vesting from claims and reduce the weekly emissions rate.

Several factors were considered before drafting this position, including:

  • Swapping the APY emissions for platform generated yield
  • Removing vesting greatly simplifies emissions for all users and makes it possible for the platform to support use cases for DAOs and institutional
  • Ensuring long-term, sustainable runway of rewards for boost-lockers, providing a tool to reward community members that are aligned with the long-term vision of the project
  • Adhering to the max reward limit of 31.2 M APY and preserving token treasury
    LPs, and making it easier for other protocols to build off of the platform
  • Protecting the long term interests of early APY.Finance supporters

The platform was developed with a max community rewards limit of 32.2 million APY. If we continue to issue 280,000 APY per week (210k for LM, 70k for LP), rewards will be distributed in a more concentrated timespan, a disadvantageous outcome for boost-lockers. Note that in order to emit rewards for the next 4 years at a constant rate, weekly token emissions would have to be at 46,923.

As a first step in reducing emissions, we propose to emit 81,700 tokens for LM and 27,233 for LP per week. In addition, we propose to remove vesting from the new emissions. Currently LM rewards vest for 6 months.

The table below shows how the change to emissions will impact APY.Finance users today and in the following weeks, and . Note that after 6 months, the total emitted tokens under reduced emissions is 80% of the claimable total emitted under the current emissions.

We believe this is a healthy compromise for users claiming APY rewards regularly and moving toward the goal of creating a sustainable runway for emitted rewards. Later proposals will take the reduction further, possibly in conjunction with other incentives.

Current Proposed non LP emissions
Week Emissions Claimable after vesting (3.89% vesting)
1 210,000 0
2 210,000 8,167
3 210,000 24,500
4 210,000 49,000
5 210,000 81,667
6 210,000 122,500
7 210,000 171,500
8 210,000 228,667
9 210,000 294,000
10 210,000 367,500
11 210,000 449,167
12 210,000 539,000
13 210,000 637,000
14 210,000 743,167
15 210,000 857,500
16 210,000 980,000
17 210,000 1,110,667
18 210,000 1,249,500
19 210,000 1,396,500
20 210,000 1,551,667
21 210,000 1,715,000
22 210,000 1,886,500
23 210,000 2,066,167
24 210,000 2,254,000
25 210,000 2,450,000
26 210,000 2,654,167

Discussion

Visit the discussion on discourse for additional details:

Vote

This proposal has two options, you can choose to vote Yes or No

Yes

The vesting period will be removed and emissions will be reduced following the passing of this proposal.

No

No action will be taken

1 Like

What do the terms Liquidity Mining and Liquidity Provider Rewards refer to?

Liquidity Mining rewards are the APY tokens that depositors in the platform receive. Liquidity Provider rewards are what those supplying liquidity on Balancer or Uniswap receive.

1 Like

In general, Iā€™m in favor of this. Removing the vesting will simplify things and increase adoption. I would rather see yield come from sources other than the emission of APY tokens (which is dilutive, and obscures the utility of the platform - although necessary in its early stages). Lowering emissions will force the focus to be on the core utility of generating yield.

1 Like