AIP - 90: Revamp ANGLE token emissions

Hello,

This is a proposal to revamp the way ANGLE tokens are being issued by the protocol in order to improve the efficiency of emissions while reducing the total amount of tokens issued by the protocol.

Context

Right now ANGLE emissions are voted by veANGLE holders following a pre-determined schedule to whitelisted gauges. The inflation rate is such that ANGLE emissions are decreasing every week at a rate such that they are divided by 1.5 every year. To check how many ANGLE tokens have been issued since launch, you can check this spreadsheet.

While this makes the ANGLE emissions fully trustless and transparent, this emission schedule results in emissions being sent for the vast majority towards liquidity pools where the cost of capital is high (more than 20%).

Proposal

Here we propose to change the system so that emissions are run by a committee made up of the signers of the guardian multisig of the protocol following an inflation schedule that is no higher than the current inflation schedule currently in place with the gauge controller system.

Rationale

The sense of the proposal here is to adopt a fully rationalized approach and focus on incentivizing places where the protocol can get the best ROI (=TVL and/or liquidity concentration per $ of incentives sent).

If ANGLE emissions are delegated to the guardian multisig of the protocol, it is in order to ensure that only what's needed is invested.

This multisig will never issue more tokens than the planned ANGLE emission schedule. If there is no need to issue ANGLE tokens on a given week (because for instance OP and ARB emissions from grants obtained are covering everything pretty well), then no ANGLE tokens will be issued.

In fact, gauges and votes to direct ANGLE emissions worked really well, but maximizing efficiency implies some nimbleness that an inflexible onchain system can hardly guarantee.

Goal here is to get down the line to a state where the ANGLE token is deflationary and where, if the incentivization scheme for veANGLE holders is buybacks, the emissions are compensated by revenue from FX market making, a % of the yield earned by the protocol on its reserves, and the potential future other token airdrops the protocol is eligible to (see Pyth airdrop).

This new system putting agility at its core will ensure:

• the increase in the efficiency of the ANGLE incentives
• while also guaranteeing that ANGLE emissions will be in all circumstances reduced from the base emission schedule which is also automatically decreasing over time In short it'll ensure that ANGLE inflation is strictly and rationally controlled and get in the short term to a state where the $ amount of ANGLE issued gets far inferior to the revenue generated by the protocol.

Another advantage of this system is that it'll enable to commit to longer co-incentive programs (e.g on Morpho markets) which wouldn't have been possible with the previous system.

Emissions by the guardian multisig will be announced and trackable directly on the spreadsheet above.

Implementation

To implement this proposal, the governor multisig simply has to set the inflation rate with the AngleDistributor contract to 0 and recover the ANGLE tokens from the contract to send them to the guardian multisig.

Governace could vote later on to adjust/change the composition of this committee in charge of liquidity mining emissions and amend the way this committee works. As it stands, the committee is expected to regularly communicate on all the emissions it runs through this spreadsheet, and the number one rule is not to issue more tokens than the predetermined ANGLE token inflation schedule.

Voting Options

1. For, revamp emissions
2. Against, do nothing