SushiSwap CEO Jared Grey has initiated a pivotal proposal titled “Deploy new tokenomics for Sushi.” This initiative, which seeks to overhaul the platform’s existing token economic model, has now entered the crucial stage of community voting on Snapshot. The voting process, critical for determining the future course of SushiSwap, began recently and is set to conclude on November 25, 2023, at 1:00.
The core of the proposal is to generate a consensus within the community. Its details and the initial draft can be found on the Sushi forum, providing comprehensive insights into the proposed changes. Grey’s initiative emphasizes the need to restructure Sushi’s token model to enhance its role in the protocol’s ongoing success and contribute to its growth trajectory. Since its inception, SushiSwap has been a front-runner in tokenomics with innovative initiatives like MasterChef and xSushi. The new proposal is a culmination of feedback from both the Sushi and DeFi communities, aiming to set the platform on a sustainable growth path.
The proposed model is built on three fundamental pillars: protocol sustainability, token utility enhancement, and treasury diversification. It addresses several key challenges, including improving rewards efficiency to reduce the annual cost of Sushi emissions, establishing a balanced approach to emissions distribution, addressing financial stability concerns, recalibrating LP incentives, and revising xSushi staking mechanisms.
Furthermore, the economic model proposed scales strategically through various innovations. These include generating primary revenue from LP transactions through trading fees, income from trade fees via aggregation, potential revenue from staking rewards, and forming strategic partnerships. The model also considers the interests of key stakeholders such as Liquidity Providers, xSushi holders, traders, token projects, DAOs, and the Sushi Treasury.
The objectives of the revised proposal are manifold. They include promoting decentralized ownership, amplifying liquidity, encouraging sustainable growth, enhancing the protocol’s sustainability, bolstering $SUSHI utility, and diversifying the treasury for robust financial operations. This new model aims to enhance liquidity, offer non-dilutive token rewards, institute a balanced supply, and ensure competitiveness in the evolving DeFi landscape.
The ongoing voting process is a decisive step for SushiSwap. A positive outcome will lead to the enactment of the proposed framework, reshaping Sushi’s token model to align with its ecosystem goals, increase decentralized ownership via the DAO, realign stakeholders optimally, and promote ecosystem growth with sustainable emissions and value.
An altcoin that helps holders earn yields is lapping the field as the crypto markets try to recover from a difficult month.
Yearn.Finance (YFI) is a decentralized finance (DeFi) protocol that offers lending and trading services so users can optimize their crypto asset earnings.
The YFI token’s price has been on fire over the past week, more than doubling from $18,867 on December 15th to a high of $39,353 on December 20th.
The altcoin first got a boost last week as word spread that Yearn had gone on a major shopping spree buying back its own token.
Yearn tweeted that it had purchased over $7.5 million worth of YFI, adding that its treasury was armed with $45 million with the intention of buying more tokens in the future.
Yearn’s price continues to surge as the community now considers a change in YFI’s tokenomics.
At the top of the list is the suggestion that token holders active in Yearn governance be rewarded with a portion of buybacks.
Yearn says in a tweet,
“Tokenomics, rewarding YFI holders with the… token buybacks, diluting paper hands for the benefit of the blue-pilled diamond hands.”
Next is a four-stage proposal involving a combination of rewards, locking tokens in vaults for set periods of time, and credit for performing useful work.
The process is outlined in a series of illustrated tweets.
“Step 1: xYFI. Stake in the xYFI vault, earn bought back YFI from the treasury. Simple as that.”
Source: 0x7171/Twitter
“Step 2: veYFI. Vote-lock YFI, with decay and time extension. Max-lock and earn disproportionate rewards compared to those who lock for a shorter duration. Early exit any time but pay a penalty to the other stakers.”
Source: 0x7171/Twitter
“Step 3: Vault gauges. Stake your yVault token in a gauge, earn YFI rewards, boosted by how much veYFI you have staked. Vote on which vaults should get allocated rewards. Pay a penalty to other stakers if you don’t have a strong enough lock.”
Source: 0x7171/Twitter
Step four involves engaging in “useful work,” which could include “configuring vault parameters, setting fees, providing insurance.”
At time of writing, YFI is down 9.25% on the day and trading for $34,553.
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Olympus DAO’s OHM token is quickly approaching its all-time high.
The project’s clever tokenomics are drawing in users and providing value.
A strong community and meme culture surrounding the project are also helping the DAO to grow.
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Olympus DAO has bounced off its summer lows and is rapidly approaching a new all-time high. The project’s clever tokenomics, strong community, and meme culture are all driving adoption.
Olympus DAO Climbs Higher
While other crypto assets swing with market volatility, one project has consistently climbed higher in the background.
Olympus DAO has risen more than 160% over the past month as interest in the project reaches a fever pitch. The OHM token is currently trading at $1,224 and is roughly 13.6% short of its all-time high of $1,415 achieved earlier this year in April. During the market crash in May, the project was hit hard, losing almost 90% of its value and dropping to an all-time low of $162. It has since rebounded with strength.
OHM/USD Chart. Source: CoinGecko
Olympus DAO is the DeFi protocol that issues the fully collateralized, free-floating OHM token. The project’s ultimate goal is to create a stable crypto asset. However, when looking at the historical price swings of the OHM token, this may seem counterintuitive.
The current previous volatility is intentional in the early stages of the project. The DAO’s current objective is to first grow the supply of OHM tokens, with stabilization coming later. In order to grow the token supply, Olympus DAO has constructed a clever tokenomic system to draw in new users and provide value.
The DAO works by allowing users to bond other crypto assets such as MakerDAO’s Dai stablecoin to the protocol, receiving newly minted and discounted OHM tokens in return. This brings in assets to the DAO, which are then deployed to generate yield.
OHM token holders can stake their tokens to receive the yields generated by the DAO, which incentivizes them not to sell their OHM. This, in turn, creates more belief in the future of the project as yields keep increasing. When the OHM token yield increases, the market values the tokens higher, increasing the price. This encourages more people to bond their assets in exchange for discounted OHM, thus completing the cycle.
Source: @RyanWatkins_
This tokenomic “flywheel” will only work if enough people are using the protocol to set it in motion. Olympus DAO has drawn users to the project through its strong community and meme culture surrounding the project.
On social media, many proponents of Olympus DAO (who refer to themselves as “Ohmies”) sport the (3, 3) suffix in their names to indicate allegiance to the project. The (3, 3) tag references the game theory of how the project works. If a user stakes OHM tokens, it is conceptualized as a +3 positive for the DAO as it causes scarcity, increasing the price of OHM. If all DAO participants choose to stake their OHM, it results in the highest possible net positive for all token holders, represented by (3, 3).
The game theory of Olympus DAO. Source: Olympus DAO Medium
The game theory meme format has become so prominent that it has even extended to other projects. For example, users of another DeFi protocol, Tokemak, have adopted a similar meme using radioactive signs instead of numbers.
Source: @TokenReactor
Additionally, Olympus DAO has gone on to inspire several similar projects. The recently launched TempleDAO takes inspiration from Olympus’ meme culture. At the same time, Wonderland, a direct fork on Avalanche, was created by DeFi 2.0 pioneer Daniele Sesta, and has received the blessing of the Olympus DAO team.
Currently, the OHM token price looks strong, with more trading volume than ever before. While the tokenomics suggest that the price will continue to increase, critics have likened the protocol to a Ponzi scheme. Whether Olympus DAO will be able to sustain its current rate of growth remains to be seen.
Disclaimer: At the time of writing this feature, the author owned BTC, ETH, and several other cryptocurrencies.
This news was brought to you by ANKR, our preferred DeFi Partner.
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