[BIP-13] - Revised BAS Emissions Schedule

[BIP-13] - Revised BAS Emissions Schedule

Authors: @yyctrader , @Morty

The current emissions schedule mints close to 930K BAS in year 1, and issuance drops to nearly zero overnight as BAS/DAI emissions are cut off. Further, we get stuck at 930K and will never approach the 1M cap since BAC/DAI emissions reduce by 25% every 30 days. This leads to 2 problems:

• Protocol runs out of incentives just when the ecosystem is picking up steam (we are currently at approximately 600K BAS minted already)
• The 1M hard cap, while great for marketing and early backers, is not the optimal long-term structure for a growing protocol. We will eventually run into a similar situation as Yearn and others, and be forced to mint more BAS anyway.

Tail emissions, or a steady rate of long-term inflation, ensures that scarcity is maintained while also providing adequate incentives for future needs. The DeFi community is slowly reaching consensus on this issue, as can be seen from the ongoing success of the Synthetix and Curve tokenomics. BAS holders must provide value to the protocol in exchange for rewards, rather than just being a pool of idle money that is capital inefficient. We have plans to address this in future BIPs.

It is proposed to transition from the current emissions schedule to the following:

At the end of Week 18, the protocol will be minting 18643 BASv2 per week and circulating supply will be approximately 600K tokens.

Starting from Week 19 (4/5 0000 UTC), weekly reductions of 7% will take place

Tail End Emissions (Inflation)

• 5% in Year 2
• 4% in Year 3
• 3% in Year 4
• 2% in Year 5 and thereafter in perpetuity

Advantages

• The protocol will never run out of incentives.
• BAS/DAI continues to be incentivized after 12 months
• Revised schedule pushes out current emissions into the future, ensuring that they are available when the ecosystem gains traction
• The scarcity factor is maintained, as we will reach 930K BAS minted in Week 200 compared to Week 52 currently. With the proposed inflation schedule, we will approach 1M BAS after over 7 years.

Note: The final emissions schedule will be frozen after V2 is live.

Detailed proposal and discussion here: https://discord.com/channels/784481893482758184/812423717375442984/817503582861262858