Summary
This proposal outlines a further reduction in XVS emissions across all supported chains, applying the same reduction percentages as the previous proposal. The goal is to continue optimizing emissions while maintaining alignment with market use cases and performance. Below is a summary of the proposed changes:
| Chain | Current Emissions (XVS) | New Emissions (XVS) | Reduction (%) |
|---|---|---|---|
| ZKSync | 4,230 | 2,451 | 42% |
| Arbitrum | 3,825 | 1,969 | 49% |
| Ethereum Mainnet | 13,595 | 7,575 | 44% |
| BNB Chain | 16,943 | 11,905 | 30% |
| Total | 38,593 | 23,900 | 38% |
A VIP will be required to implement these changes, modifying the reward distribution speeds on all chains to match the new emissions if approved by the community.
Funding Request
To support the new emission levels for 3 months, the following funding is requested for ZKSync, Arbitrum, and Ethereum Mainnet (BNB Chain is excluded as XVS is already available there):
- ZKSync:
- New emissions per month: 2,451 XVS
- Total funding for 3 months: 7,353 XVS
- Arbitrum:
- New emissions per month: 1,969 XVS
- Total funding for 3 months: 5,907 XVS
- Ethereum Mainnet:
- New emissions per month: 7,575 XVS
- Total funding for 3 months: 22,725 XVS
Total funding requested for 3 months: 35,985 XVS
Details
Reduction Strategy
The reduction strategy applies the same percentages as the previous proposal, ensuring consistency in the approach:
- ZKSync: 44% reduction
- Arbitrum: 65% reduction
- Ethereum Mainnet: 60% reduction
- BNB Chain: 30% reduction
Supply and Borrow Incentives
The allocation of emissions between supply and borrow incentives will remain unchanged, focusing on the most relevant use cases for each market:
- Non-Stablecoin Markets: Emissions will focus on the supply side to incentivize collateralization.
- Stablecoin Markets: Emissions will focus on the borrowing side to support borrowing positions.
XVS Vault
A 30% reduction will be applied to the XVS Vault across all chains, consistent with the previous proposal. This gradual reduction allows for continued evaluation of user behavior and further adjustments in the future.
Tables for Each Chain
ZKSync
| Pool | Market | Current Allocation (XVS) | Reduction | New Allocation (XVS) |
|---|---|---|---|---|
| Core | ZK | 630 | 30% | 441 |
| Core | ETH | 600 | 50% | 300 |
| Core | BTC | 600 | 50% | 300 |
| Core | USDT | 450 | 50% | 225 |
| Core | USDC.e | 900 | 50% | 450 |
| Vault | XVS | 1,050 | 30% | 735 |
| Total | 4,230 | 42% | 2,451 |
Arbitrum
| Pool | Market | Current Allocation (XVS) | Reduction | New Allocation (XVS) |
|---|---|---|---|---|
| Core | ARB | 239 | 75% | 60 |
| Core | WETH | 239 | 75% | 60 |
| Core | WBTC | 319 | 50% | 160 |
| Core | USDT | 479 | 75% | 120 |
| Core | USDC | 479 | 75% | 120 |
| LST | ETH | 1,020 | 30% | 714 |
| Vault | XVS | 1,050 | 30% | 735 |
| Total | 3,825 | 49% | 1,969 |
Ethereum Mainnet
| Pool | Market | Current Allocation (XVS) | Reduction | New Allocation (XVS) |
|---|---|---|---|---|
| Core | WETH | 475 | 75% | 119 |
| Core | WBTC | 949 | 50% | 475 |
| Core | USDT | 1,709 | 75% | 427 |
| Core | USDC | 1,709 | 75% | 427 |
| LST | ETH | 3,713 | 30% | 2,599 |
| Vault | XVS | 5,040 | 30% | 3,528 |
| Total | 13,595 | 44% | 7,575 |
BNB Chain
| Pool | Market | Current Allocation (XVS) | Reduction | New Allocation (XVS) |
|---|---|---|---|---|
| Core | XVS | 900 | 25% | 675 |
| Vault | VAI | 2,813 | 30% | 1,969 |
| Vault | XVS | 13,230 | 30% | 9,261 |
| Total | 16,943 | 30% | 11,905 |
Supply and Borrow Emissions Distribution
The distribution of emissions between supply and borrow rewards will remain unchanged, as outlined in the previous proposal.
Note on Uniswap Rewards
Due to the recent addition of new chain rewards in Uniswap, these rewards will be evaluated and adjusted at a later date, following the Uniswap reward proposal. This ensures that emissions remain aligned with market conditions and performance.
Recommendations
The proposed adjustments aim to further optimize XVS emissions while maintaining consistency with the previous strategy:
- Reduce total emissions by 45%, applying the same proportional reductions as the previous proposal.
- Align emissions with use cases: Continue focusing on supply rewards for collateral markets and borrow rewards for borrowing markets.
- Maintain the 30% reduction for XVS Vault emissions to evaluate user behavior and adjust as needed.
- Ensure flexibility to reassess emissions based on future market conditions and data.
This proposal builds on the success of the previous adjustments, ensuring a sustainable and efficient emission strategy for XVS.