Reduce ACX emissions to ACX LPs

Author(s): ACX Emissions Committee (Kevin Chan, David Korpi, Ryan Carman, Dylan O’Reilly, Chase Coleman) Status: Proposed Related Discussions: Reduce ACX emissions forum post, Emissions committee

Summary:

The Across DAO should decrease ACX emissions for Across ACX LPs. The ACX liquidity pools are being rewarded a high APY in comparison to the utilization of the asset or necessity of the emissions. The ACX Emissions Committee only has permissions and a framework to control ACX emissions for ETH, USDC, USDT, and DAI. We are putting together this one-off proposal to decrease ACX emissions in a similar way to ETH, USDC, USDT, and DAI.

Motivation:

The Across DAO should optimally manage ACX emissions for all liquidity it incentivizes. One way that we have done this previously is by creating the ACX Emissions Committee (AEC). The AEC uses a transparent and restrictive framework to adjust emissions awarded to Across ETH/USDC/USDT/DAI LPs. The framework monitors the utilization and comparable yield alternatives of each asset to make ACX emissions adjustments. Across ACX LPs were excluded from the AEC's purview because there are more considerations than just utilization and comparable yields when we think about what the "optimal" ACX emissions to pay are.

ACX emissions for ACX LPs were initially set high to incentivize ACX airdrop recipients to not immediately sell their tokens and to get these token holders familiar with the reward locking mechanism. It’s been over 1.5 years since the launch of the token and the current level of emissions is not necessary. These emissions were reduced late last year, but a further reduction is now necessary. ACX utilization consistently sits close to zero given a lack of bridging needs. Yet, the emissions rate for the ACX LP is by far the highest at 26.7k ACX per day (which nearly exceeds the sum of emissions being used for ETH, USDC, USDT, and DAI).

The bottomline is that the Across DAO should decrease ACX LP base emissions by 50% from 15k ACX per day to 7.5k ACX per day.

Specification & Implementation:

The ACX LP emissions are currently 15,000 ACX per day. Our proposal is to lower this to 7,500 ACX per day. If approved, this will be implemented by the AEC.

Rationale:

Rationale is described above. Please also reference the logic from Dylan's comment on the forum thread.

Downside (Cons):

As highlighted in the discussion forum, there is the potential that some ACX LPs withdraw their funds and sell -- The AEC believes that this will be a relatively muted effect as the ACX LPs are still receiving a significant amount of emissions and the onchain and offchain liquidity of ACX has increased.

Voting:

A yes vote means that you would like to decrease the ACX emissions being paid to ACX LPs from 15,000 ACX/day to 7,500 ACX/day.

A no vote means that you would like the ACX emissions being paid to ACX LPs to stay the same.