Emissions Adjustments for Arbitrum

Proposals
1

Summary

This proposal recommends adjusting XVS emissions on Arbitrum by reducing them by 25%. This will be the first adjustment for the Arbitrum Core Pool, and the reduction will be based on an analysis of TVL. The analysis details and recommendation are as follows:

Pool Market New Monthly Allocation (Change)
Core ARB 319 (-25%)
Core ETH 319 (-25%)
Core BTC 638 (-25%)
Core USDT 638 (-25%)
Core USDC 638 (-25%)
Total 2,552 (-25%)

Details

Considerations

All prices and market TVLs are considered for Sept 18, 2024

TVL Analysis

The TVL participation for each market is analyzed to filter out the most significant markets. The goal is to identify markets that hold a significant portion of the total TVL and categorize them into two tiers.

  • Tier 1: Markets with more than 5% in TVL
  • Tier 2: Markets with less than 5% in TVL

The following table shows the TVL participation:

Pool Market Supply Amount Borrow Amount TVL Proportion
Core USDT $1,160,000 $932,090 17.86%
Core ARB $545,410 $241,880 6.72%
Core USDC $1,770,000 $1,200,000 25.35%
Core WETH $1,070,000 $794,250 15.91%
Core WBTC $3,230,000 $771,390 34.16%

All markets fall into Tier 1

Recommendations

All markets in the core pool have significant participation. Therefore, as this is the first emission adjustment, the recommendation is to apply a unified 25% reduction across all markets. The market’s response will be evaluated, and further actions will be taken to fine-tune the optimal settings to support the growth of the Arbitrum deployment.

Pool Market Current Monthly Allocations Adjustment New Allocation
Core ARB 425 25% 319
Core ETH 425 25% 319
Core BTC 850 25% 638
Core USDT 850 25% 638
Core USDC 850 25% 638
Total 3,400 25% 2,552

This proposal requests XVS funding to support these incentives until January 2025. Additionally, XVS funding for the LST pool will be requested to extend rewards until January, ensuring synchronization of both emission adjustments and funding calendars. The required amounts per distributor are as follows:

Distributor Monthly XVS Amount Total XVS Amount for 4 Months
Core 2,552 10,208
LST 5,100 5,100
Total 7,652 15,308
6 Likes
2

I think this proposal for emission adjustment on Arbitrum is perfect. I believe the 25% reduction is a well-founded measure by the team. Additionally, as we know, this is the first adjustment made since its launch on Arbitrum, and I see applying a uniform reduction across all markets as a prudent and balanced strategy to observe how the ecosystem responds before making more specific adjustments.

I was really pleased to learn that the rewards will be extended until January 2025, as this will ensure the continuous growth of user participation in Arbitrum. Let’s keep growing together as a community!

1 Like
3

The same strategy of emission reduction applied also for Arbitrum. I am Voting FOR.

4

Nice work, we keep buiding

5

It’s time that Venus protocol adjusted XVS emissions on Arbitrum by reducing them by 25%. So I agree with this proposal.

6

Reducing issuance is a good trend for the whole protocol. we should focus on committed holders.