LIP#15: LGO Emission Adjustment

MOTIVATION

Level is built to be a systemically relevant marketplace for programmatic liquidity across blockchains. Modularly developed and iteratively improved upon over multiple market cycles. The project’s tokenomics has an initial target emission over ~3.7 years, and the team’s stake in the project unlocks over 4 years. When the dual Dutch auction system was implemented, it was deployed with the intention of making both LVL and LGO more accessible to the community. The LVL auction is designed to only succeed if demand for LVL is substantially higher than the selling pressure, and will only clear if the price is above the previous low. During periods of downward volatility or thinner liquidity, the auction is meant to fail. Conversely the LGO auction is an alternative way for the community to gain access to governance by burning LVL. As we’re finishing preparation for the final portion of the 1.5 Upgrade and awaiting publication of the Quantstamp audit (along with all the implemented security updates), we want to take this opportunity to bring forth a series of quality of life improvements as well as balance some of the recent initiatives.

With the final portion of the 1.5 Upgrade (coming in the next 1-2 weeks), we will propose the complete transfer of the platform’s economics to the DAO. The entirety of the remaining ~$200m LVL [ex-team allocation] will be transferred to the DAO’s administration and fully owned by the Treasury. Rewards, incentives, as well as all emissions will be made directly out of the DAO. Proposals and delegations of votes will be live, and the community (along with our new ecosystem partners), will collectively materialize the full potential of the project alongside our team.

Given the anti-dilution feature of the LGO auction, we realize that a significant amount of LGO reward is being distributed to those participating in DAO Staking shortly following each successful auction. So as to ensure the longevity of the project and to accelerate the accumulation of redemption value of LGO under the treasury, we propose to reduce the daily LGO emission from the 0.685 since inception to 0.5 and cap the maximum LGO auction amount to 0.5 per auction.

PROPOSAL: Reduce LGO daily emission from 0.685 to 0.5 LGO LGO auction amount will be capped to a maximum of 0.5 LGO per auction

VOTING OPTIONS Choose one of the following options to vote on:

YES - Agree with this proposal. NO - Take no action.

ELIGIBILITY Only LGO token holders are eligible to vote.