Beefy Tokenomics 3.0

Introduction The Beefy token price has inversely correlated with the value of Beefy, the breadth of impact Beefy has made, and the equity Beefy currently commands on the Ethereum, Avalanche, Base, Berachain, BNB, HyperLiquid, Linea, Optimism, Polygon, SEI, and Sonic ecosystems. Below is the proposal to update the tokenomics of the BIFI token to more accurately accrue value to the Beefy token.

• Before proceeding, better formatting for readability of this proposal is here: https://telegra.ph/Beefy-Tokenomics-30-06-11

Background and Reasoning

This current and recent price trend on the Beefy token has not properly tracked the value, productivity, capabilities of Beefy. This is shockingly apparent when doing the most simple apples-to-apples compare Beefy to Beefy's most similar competitor Yearn - both in functionality and size ($320 million TVL of Yearn vs $290 million of Beefy).

Yearn Finance, has only 10% more TVL than Beefy, but instead of their total token YFI's token's valuation being valued by the market as $12m, Yearn is valued at $206m. This is 17x larger for essentially the same TVL , with much less capability and functionality.

What Needs to Be Done

Artificially creating "interest" in a coin by marketing gimmicks can be very short lived or unfruitful altogether. Genuine product building with valuable and modern capabilities for the modern times is how the value of a protocol will increase. Beefy has been consistently doing this via the DAO's contributors (thank you for your hard work, thoughts, innovation, implementations, updates, and more Beefy contributors!) , yet potential buyers of the BIFI coin are likely spooked by the price chart, and have likely heard no "buzz" about the BIFI token doing well (price-wise) over the last 2 years, so they have taken it off their radar and are instead putting their capital to use in coins which are more likely to generate "mass pumps" by "a wave of retail or degens".

Beefy's coin being noticed by the larger crypto community and buyers as being genuinely desirable to acquire and stack will likely come from the following events:

1. Price going up
2. Chart showing increase consistently over time

when these 2 items occur, there will likely be an organic movement and rediscovery of Beefy and it's current cash-flows and treasury. When organic interest starts, people start sharing their price predictions and purchases to the crypto and/or CT community and other "alpha" to stack the BIFI token. Luckily, since all the BIFI tokens that will ever be created are already in existence, which makes the BIFI token extremely scarce and well positioned to violently move up with the right support. The token scarcity and HODLers of Beefy, along with it's constant cash flow that is based upon vaults of desirable and widely held tokens create the perfect environment for the BIFI token price to go up.

... so why hasn't the price gone up much then? What has likely caused the price decrease in the Beefy token is these two variables:

1. Emotional fear of chart continuing to trend downward
2. Buyers allocating funds towards projects which have more short term hype around them

so this means given the circumstances the DAO may desire adapt to the situation and use it to our advantage.

The question is "how do we increase the price of BIFI (addressing #1) while also disincentivizing HODLers from swapping it for a coin that has more "hype" "narrative" "astronomical projections from speculators (addressing #2)"

The Optimal Solution to the above is Twofold

Part A: Turn on the incinerator and put gasoline on it

Rationale: By adding an accelerant on the BIFI chart which pushes the token up twice (first through buying the token, second when it is burned), the chart will likely start to go up.

What is that accelerant? A burn mechanism. When a sizable portion of the daily BIFI token buying is permanently removing the tokens in LP pools from circulation, the LP pools shrink, and the amount of money swapping into the BIFI token needed starts to drastically decrease, meaning the BIFI token price moves upwards even with small of amounts of buying activity

How: Implement a 1.5% fee on all vaults which will buy back and burn the BIFI token

Stats: Create a Burn Dashboard (see PancakeSwap's Burn Dashboard for basic inspiration https://pancakeswap.finance/burn-dashboard). At the current rate of vault earnings, a projected 15.78% of Beefy's annual $2.8m in revenue would be burned, which is $420k per year, or a 3.5% deflationary pressure at current levels to push the token upwards which is in synergistic addition to the current ~11% buying pressure of the BIFI stakers.

With just part A implemented, we are at a current net result is around a 14.5% annual yield on current BIFI as of today.

Part B: Reward HODLers

Rationale: When previous purchasers of BIFI who don't understand the long term impact, inner workings, cash flow, value, or product-market-fit of Beefy get to their respective break-even on their investment, or get into the profit zone, they may panic sell. This goes back to the two reasons from before of:

1. Emotional fear of chart continuing reverting to trend downward, and they believe "this is finally their time to exit at a small loss, breakeven, or profit before the chart dumps again"

2. Desire to allocate funds towards projects which have more short term hype around them which have the charts going up faster & have a general upward trend instead of a downward one

What: We introduce a locking mechanism to the BIFI token which rewards long term HODLers of Beefy and buyers who want relatively stable cashflow.

How: Implement a 1.5% fee on all vaults which will go toward those who lock BIFI for 90 days or more

Stats: At the current rate of vault earnings, a projected 15.78% of Beefy's annual $2.8m in revenue would be distributed to HODLers, which is $420k per year, or a 3.5% buying pressure to push the token upwards which is in synergistic addition to the fact that those BIFI tokens can not be sold on the open market for 90 days. With the current annual~11% buying pressure of the BIFI stakers, the annual buying pressure from buying back and burning - AND the permanent removal of the token from the burn, and this additional buying pressure to distribute that BIFI to lockers will create an estimated around a 18% annual yield on current BIFI at current market conditions.

That means, if someone buys BIFI and locks it even if the price dips by 18%, they will still be break-even on their investment dollar-for-dollar at the end of the year. If the price of BIFI goes up by 18% for the year, they will be up 36% on their investment for the year.

If organic demand and attention starts being directed towards BIFI due to this chart pump, and/or a bull market compounds that interest, the returns will be much higher.

Is this adjustment of 3% more to the fee now fairly compensating BIFI holders? Maybe it's too high?

• Yearn's v2 vaults charge a flat 20% of yield earnings

• Yearn's v3 vaults charge up to 0-50% of vault earnings (each v3 vault fees determined by DAO)

• YieldYak (a previously Avalanche native yield aggregator) charges 5-10% of performance, with MUCH less variety of vaults, upgrades, new chains, development.

• AlphaFi (the yield aggregator on SUI) charges 20% of yield as their fee

Compare this to Beefy's current 9.5%. Beefy offers the most vaults, is deployed across the most chains, has the most integrations and capabilities, but has nearly the lowest fees. Beefy may want to consider moving up to 15% to 20% of performance as fees like our competitors do in the future, but for now a call for only a fair 12.5% is called.

TLDR:

• Beefy has innovated and developed the most, but the price action has not followed

• The price action is likely spooking away new buyers, and causing old buyers to dump at break-even or profit out of ignorance of the platforms revenue and tokenomics

• We can't artificially generate interest in the token or force the price chart to go up, so we need a solution. Beefy has been historically under compensated based on fair-market-competitors.

•Two simple solutions will propel the token higher.

 1 - add an accelerant to the token's scarcity and availability scarcity; a burn mechanism. 

 2 - take a portion of newly adjusted fee, and pay it out to users who are willing to lock their token's, which temporarily removes tokens from being sold on the market. This exacerbates the scarcity from #1, as those tokens are temporarily removed from circulation, removing more sell pressure in exchange for reaping additional rewards for the person who exchanged their ability to sell BIFI for a specified amount of time for said additional rewards.

HOW TO VOTE The choices and their meaning

YES to this, Let's Burn & Lock

Meaning: This means Let's Burn BIFI at the 1.5% fee rate (it burns so good).  The ability to lock BIFI also will be implemented.

Ok, but ONLY the Burn at 1.5%

  Meaning: This means Let's Burn BIFI at the 1.5% fee rate. Forget the ability to lock BIFI with a reward for those who do

Ok, BUT Let's Burn at 3% ONLY

  Meaning: Let's dial up the burn of BIFI tokens at a 3% fee rate ONLY, and let's not of implement the ability to lock BIFI for a reward and rewarding those who do. 

NO! No update to tokenomics

  Meaning: This is all bollocks, no updates to tokenomics. These updates to the tokenomics and this burning and locking will do more harm than good to our scared cow and it's token, BIFI.

EXTRA INFORMATION

The Technicals on the Locked BIFI bonus (mooAirdrop) How would it work?

Due to limited text available to include in a proposal, for the specific technical details, at the bottom of this link in the EXTRA INFORMATION Section at the bottom. Overall you can read this whole proposal there as it is much better formatted