TIP-008: Bunni v2 Migration and Enhanced Tokenomics Framework

Summary This proposal establishes the framework for migrating to Bunni v2, including the transition from $LIT to $BUNNI tokens, implementation of new tokenomics, and introduction of a structured fee distribution system. The proposal encompasses token migration mechanics, emission structures, governance processes, and a comprehensive incentive program spanning 12 months, aligned with the anticipated launch of Uniswap v4.

Background The current token ($LIT) lacks meaningful brand connection with the Bunni product, and the existing gauge system has proven suboptimal for directing emissions to encourage TVL growth and revenue generation. As Bunni approaches its v2 launch, this comprehensive tokenomics overhaul will align the protocol's incentives with sustainable growth and revenue generation.

Proposal

1. Token Migration Framework Convert $LIT to $BUNNI at 1:1 ratio (indefinite conversion window) Total $BUNNI supply: 1 billion tokens New $veBUNNI locking mechanism: Direct $BUNNI locking Maximum 1-year lock duration $veBUNNI assumes control of governance $veLIT continues receiving weekly $BAL emissions and $WETH distributions from remaining $oLIT exercises
2. Airdrop Distribution Snapshot block: 20866918 Allocations (all with 1-year lock): $veLIT holders: 98,631,856.48 $veBUNNI $LIQ holders: 8,000,000 $veBUNNI Testnet participants: 5,085,500 $veBUNNI Note: $liqLIT holders included in $veLIT allocation Migration Bonus Details:

$veLIT holders receive 100% migration bonus Calculation: bptLocked * litPerBPT * 1.25 (includes $WETH value in $LIT from locked BPTs) Testnet Quest Allocations:

11 Quests completed: 600 $veBUNNI per quest 8-10 Quests completed: 200 $veBUNNI per quest 5-7 Quests completed: 100 $veBUNNI per quest 1-4 Quests completed: No allocation 3. Protocol Fee Distribution Structure Initial Protocol Fee: 10%

Graduated Distribution Schedule:

Period Treasury veBUNNI Referral 0-3 Months 0% 0% 100% 3-6 Months 20% 15% 65% 6-9 Months 30% 25% 45% 9-12 Months 45% 30% 25% Onward 45% 40% 15% Technical Implementation:

Euler's FeeFlowController mechanism for fee auctions WETH as designated purchase token Protocol fee and distribution parameters adjustable by governance 4. Emissions and Incentives Framework Current System Changes:

Elimination of current gauge system Pause of all Bunni v1 gauges on November 1st Implementation of transferless staking contracts: Improved gas efficiency Permissionless liquidity mining incentives using any token on any chain Integration with on-chain referral system Epoch-Based Model:

3-month epochs Initial Epoch 1 allocation: 25,000,000 $BUNNI Fixed allocation structure: 10% to support ETH/BUNNI liquidity 70% to support core revenue generating pools 20% to new incentive applicants Incentive Program Requirements (12-month duration):

Each epoch proposal published by the TEU and TGU must include: Previous epoch performance metrics Cost-benefit analysis Revenue generated per pool Strategic pool selection rationale Performance targets TVL efficiency metrics Growth trajectory data Swap fee revenue projections Market share goals Revenue distribution forecasts 5. $oBUNNI Implementation Provision for future activation pending technical requirements, such as a liquid ETH/BUNNI market for reliable oracle pricing. Activation will be subject to governance approval. Historical success: 1700 WETH generated over 20 months in v1. 6. Technical Implementations FeeFlowController mechanism for protocol fee auctions Transferless staking contracts deployment New governance mechanism activation Migration system deployment Implementation Path Phase 1: Technical Foundation

Contract deployment ($BUNNI, $oBUNNI, $veBUNNI) FeeFlowController implementation Transferless staking contracts deployment Security audit completion Phase 2: Migration Activation

Enable $LIT to $BUNNI conversion Process airdrop distributions Launch $veBUNNI locking Initialize new governance system Phase 3: Incentive Activation

Deploy initial liquidity pools Activate Epoch 1 emissions Implement performance monitoring Budget Audit Requirements:

Vendor: Pashov Audit Group Cost: 48,000 USD Scope: All migration and new mechanism contracts Initial Incentive Allocation:

Amount: 25,000,000 $BUNNI Purpose: First 3-month epoch Primary focus: ETH/BUNNI pool and key revenue-generating pools Next Steps Upon Approval Following achievement of quorum and majority support:

Immediate Actions:

Initiate audit process with Pashov Audit Group Complete contract development and testing Prepare technical documentation Pre-Launch:

Complete security audits Deploy and verify smart contracts Release migration documentation Configure monitoring systems Launch:

Activate token migration Process airdrops Enable governance mechanisms Begin incentive distribution Post-Launch:

Monitor system performance Prepare first epoch metrics Enable governance proposals with support of veBUNNI token. Conclusion This proposal represents a comprehensive overhaul of Bunni's tokenomics and governance structure, designed to maximize protocol value through:

Clear brand alignment with token migration Efficient emission distribution Structured fee sharing Performance-based incentives Community-driven governance The implementation prioritizes security, sustainability, and community participation while establishing clear metrics for success. The graduated fee distribution schedule and epoch-based emissions provide flexibility for governance to optimize protocol performance over time.

Notes:

All allocations and calculations are subject to final verification before implementation Governance maintains the ability to adjust parameters as needed Regular performance updates will be provided to the community