[EXAIP-16] Increasing the esEXA Reserve

• Proposal ID: EXAIP-16
• Proposer: Exactly Core Team
• Date: 07 October 2024

Summary

This proposal seeks to increase the Reserve factor for EscrowedEXA (esEXA) from 25% to 35%. The adjustment seeks to further enhance the protocol's financial stability and safeguard the interests of our long-term community members.

Background

It has been one year since we launched esEXA to transition to a more stable rewards system.

The idea behind esEXA is to provide rewards equivalent to EXA but with a linear vesting period, gradually releasing EXA tokens, ensuring that the Exactly protocol remains sustainable and rewarding for long-term community members.

Under the current mechanism, EXA holders burn their esEXA tokens to initiate the 12-month vesting period and convert them into EXA tokens through Sablier. To initiate the vesting process, users must reserve a portion of their EXA tokens as a reserve, with the reserve amount being a percentage of the total vesting amount. Initially, the reserve percentage was set at 15% and later increased to 25% (EXAIP-06).

Users can cancel the vesting at their discretion, triggering the withdrawal of all vested EXA tokens from Sablier and the associated reserve. Any unvested tokens are returned to the corresponding user.

The gradual release of EXA tokens through esEXA’s linear vesting system mechanism has proved highly effective in fostering protocol stability and aligning incentives with long-term holders.

Looking at the latest data:

• 1.3 million esEXA tokens initiated the vesting, representing nearly 13% of the EXA total supply.
• 2.3k active vesting streams and 1.2k esEXA holders indicate consistent vesting mechanism engagement.

You can check all the esEXA stats in our Dune dashboard: https://dune.com/exactly/esexa

Proposal

This proposal aims to increase the Reserve factor from 25% to 35%, increasing the EXA demand and bolstering Exactly Protocol's financial resilience.

Conclusion

By increasing the EscrowedEXA Reserve factor from 25% to 35%, we aim to fortify the protocol's financial foundations, provide lasting benefits, and safeguard the interests of our long-term community members.