[ExIP-01] ExtraFi Tokenomics V2 (revised version)

Voting ended about 2 years agoSucceeded

Background

In 2023, Extra Finance experienced significant growth and received numerous constructive suggestions from our community. As the protocol continues to evolve, we propose an update to our tokenomics to better align with the protocol’s growth and community feedback.

(For relevant data regarding $EXTRA, please refer to the end of this proposal.)

Keywords

Improvement in veEXTRA Staking Rewards
Disinflation & Quarterly burn mechanism
Team lock extension (6 months)
Token flywheel in ExtraFi

1. Improvement in veEXTRA Staking Rewards

Enhance the predictability and stability of the veEXTRA staking APR, providing a more consistent and reliable return for veEXTRA holders.

Modify the veEXTRA staking APR by introducing a floating coefficient that aligns emissions with the protocol's fee income buyback.

Initially, 30% of the fee buyback will be matched. This will be reviewed on a quarterly basis in the future. Governance will determine whether adjustments are necessary.
Improve the staking UI to provide clearer information on emission and buyback data.

New Pool Listing Base dark (8).png

2. Alleviation of Inflationary Pressure

Enhance overall tokenomics by curbing inflationary pressures and fostering a more sustainable ecosystem.

Emission Adjustment: Targeting the community and ecosystem fund, we propose reducing each token unlock to 50% of the current rate. (Current allocation & emission https://docs.extrafi.io/extra_finance/tokenomics/allocation-and-emission)
Quarterly Burn of Unused Tokens: We will implement a community-driven approach to burning a specific percentage of the remaining tokens each quarter. The exact percentage will be determined by the community on Snapshot every quarter.

For 2023 Q4, of the monthly emissions $EXTRA allocated to the community, we will burn 30% and allocate the remaining 70% to the treasury, which is the proportion decided by the community vote. (https://discord.com/channels/1009330898967212063/1186612128417857576/1186612128417857576)
Optimization of Fee Income Allocation: The optimized distribution would be 50% to veEXTRA Holders, 40% to the Treasury, and 10% designated for the PoL to boost market liquidity. (currently 50% to veEXTRA Holders and 50% to the Treasury.)
The team extends the lock-up period by 6 months.

Frame 1314 (2).png

3. Protocol & EXTRA Token Flywheel

Token in ExtraFi X: In the upcoming ExtraFi X version, we will increase the utility of veEXTRA within the product.
Normalized Governance: veEXTRA holder governance will become a standard practice. For instance, following a Discord discussion on current issues, veEXTRA holders will vote on Snapshot for decision-making.

Relevant data regarding $EXTRA:

Frame 1313 (2).png

Off-Chain Vote

Approve

8.86M veEXTRA100%

Reject

0 veEXTRA0%

Abstain

0 veEXTRA0%

Quorum:17721%

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Timeline

Jan 19, 2024Proposal created

Jan 20, 2024Proposal vote started

Jan 27, 2024Proposal vote ended

Jan 27, 2024Proposal updated

Background

(For relevant data regarding $EXTRA, please refer to the end of this proposal.)

Keywords

Improvement in veEXTRA Staking Rewards

Disinflation & Quarterly burn mechanism

Team lock extension (6 months)

Token flywheel in ExtraFi

1. Improvement in veEXTRA Staking Rewards

Enhance the predictability and stability of the veEXTRA staking APR, providing a more consistent and reliable return for veEXTRA holders.

Modify the veEXTRA staking APR by introducing a floating coefficient that aligns emissions with the protocol's fee income buyback.

Initially, 30% of the fee buyback will be matched. This will be reviewed on a quarterly basis in the future. Governance will determine whether adjustments are necessary.

Improve the staking UI to provide clearer information on emission and buyback data.

2. Alleviation of Inflationary Pressure

Enhance overall tokenomics by curbing inflationary pressures and fostering a more sustainable ecosystem.

Emission Adjustment: Targeting the community and ecosystem fund, we propose reducing each token unlock to 50% of the current rate. (Current allocation & emission https://docs.extrafi.io/extra_finance/tokenomics/allocation-and-emission)

Quarterly Burn of Unused Tokens: We will implement a community-driven approach to burning a specific percentage of the remaining tokens each quarter. The exact percentage will be determined by the community on Snapshot every quarter.

For 2023 Q4, of the monthly emissions $EXTRA allocated to the community, we will burn 30% and allocate the remaining 70% to the treasury, which is the proportion decided by the community vote. (https://discord.com/channels/1009330898967212063/1186612128417857576/1186612128417857576)

Optimization of Fee Income Allocation: The optimized distribution would be 50% to veEXTRA Holders, 40% to the Treasury, and 10% designated for the PoL to boost market liquidity. (currently 50% to veEXTRA Holders and 50% to the Treasury.)

The team extends the lock-up period by 6 months.

3. Protocol & EXTRA Token Flywheel

Token in ExtraFi X: In the upcoming ExtraFi X version, we will increase the utility of veEXTRA within the product.

Normalized Governance: veEXTRA holder governance will become a standard practice. For instance, following a Discord discussion on current issues, veEXTRA holders will vote on Snapshot for decision-making.

Relevant data regarding $EXTRA: