BIP #04 (a): Towards Sustainable Revenue Growth & Development

Simple Summary:

We recently introduced BIP-04[TEMP CHECK] which proposes a sequence of changes to revive long-term sustainability and retention.

These proposed changes, outlined in the temp check proposal, will be presented for voting in multiple stages.

The current proposal [i.e. BIP-04 (a)] specifically focuses on revising the revenue-share model and abolishing inflationary tokenomics.

Abstract:

Problem 1: The current incentive structure is not producing the competitive markets necessary to maximize Buffer incentives and generate organic trading volume.

Change: Introduce a consistent and transparent fee structure incentivizing the core volume/TVL drivers of the platform.

Problem 2: esBFR and MPs were vital in initially aligning token holders and LPs with the protocol's long-term vision. However, as Buffer is maturing - they eventually pose a barrier to wider adoption of the platform. Additionally, they also dilute the impact of the current buyback and burn model due to emissions being larger than the amount of $BFR bought back.

Change: Phase out esBFR and MP emissions to curb inflation & introduce a cleaner simpler Buffernomics - without hindering user experience.

Specification:

1. New Revenue Share Model:

• 95% of the protocol-generated trading fee distributed to LPs (to be directly accrued into the BLP Pool)

• 5% of the protocol-generated trading fee is to be streamed to a new and configurable pool, reserved until the new value accrual mechanism is established.

2. Phase out esBFR emissions:

• Configure a converter contract to facilitate esBFR to BFR conversion.

• Users can un-stake their esBFR which is then routed to the converter contract.

• The stored esBFR in the converter contract is then instantly converted to $BFR at a 50% discount.

Implementation:

By voting yes to this proposal you support the redistribution of protocol trading fees to the power users of the platform & phasing out inflationary tokenomics. By voting "Against", you preserve the status quo as listed in the temp check proposal.

The vote will be binding - should the majority vote “For” excluding "abstain" - the proposed changes will be implemented within 7 days of the proposal passing.