NOTE The subject of this vote is the maximum supply of the Locus token. Please also review other ongoing votes regarding Locus Tokenomics. The full document with tokenomics description is located here: https://docs.google.com/document/d/1b3K_TzRx4L3fr3AW_yQdFYV240XVaqXFyS83DmNthiM/edit
INTRO The maximum supply of a cryptocurrency refers to the maximum number of tokens that will be ever created. The result of this vote will affect the APR of the Locus token, the volatility of the token and other key points that will be elaborated below.
What supply better suits Locus?
- Medium emission rate in case of 15 mil Locus tokens.
The 15 mil supply option has higher emissions, giving more space to market Locus products through extra APR. In this model, the extra APR in Locus for vaults can reach up to 15%. It is a more aggressive model that should add more volatility to the token but can help us reach our target values of 50 mil TVL in vaults rapidly to start generating revenue for Locus holders, making its instrict value higher. The Locus staking APR is reaching 20% in Locus tokens, which will favour long-term holding at the cost of liquidity.
The calculations can be found in the sheet below.
https://docs.google.com/spreadsheets/d/1LGjXf2Uy2IIXB8FwOilFfF_66aBUmGFvIuEE2Dpld_E/edit?usp=sharing
SUMMARY 10 million supply = low APR, steady growth, low dilution of supply, fewer tokens to manage by DAO. We will not be able to launch aggressive TVL campaigns, but growth will be organic.
15 million supply = the possibility to turn on high APR for any of the products, high APR for Locus staking, higher token volatility, and requirement for additional liquidity incentives.
It is important to say that DAO will be able to vote for the allocation of every token emitted, so it can be adjusted on the run and based on the market situation and protocol health.