Restructuring Metavault’s token emissions for Long-Term Sustainability

ntroduction:

Metavault Trade has been experiencing consistent growth and generating substantial revenue from various partnerships, such as QuickPerps, Grizzly FI, and 0xBets.

The increasing revenue has proven to be highly beneficial for MVX stakers, however, it is crucial to address the potential dilution of supply and rewards caused by the emissions of esMVX and multiplier points.

We have observed similar challenges in our parent protocol, GMX, where the emission of esGMX and multiplier points has led to a reduction in real yield rewards and an inflationary impact on GMX.

In order to maintain the sustainability of MVX and ensure its long-term value, it is imperative to propose changes to the current emission structure.

Objective:

The main objective of this proposal is to decrease the emissions of esMVX and multiplier points to prevent further dilution of the MVX supply.

This strategic decision will also lead to a reduction in the total MVX supply from 10 million to 4 million, thus creating scarcity and enhancing the token's value.

Additionally, we aim to transform MVX into a deflationary token by utilizing the fees generated from Uniswap pools (1% fee) to burn MVX.

By adopting a deflationary approach, we aim to comply with SEC regulations and reduce potential issues related to tax and token security concerns.

Implementation Plan:

To achieve our objectives, the following solutions are proposed, and we seek the community's opinon:

1. Stop esMVX emissions and cap to 100% max boost: We propose to set a maximum cap of 100% for the multiplier point boost. By doing so, we can control the rate at which rewards are distributed and prevent excessive dilution of the yield rewards. This measure will find a balance between incentivizing stakers and maintaining the sustainability of the protocol.
2. Stop esMVX emissions and lower MP APR to 50%: To address the dilution of rewards, we recommend reducing the APR to 50% of multiplier points. This adjustment will ensure a more sustainable and equitable distribution of rewards to stakers, while maintaining the attractiveness of MVX as a yield-bearing asset.
3. Stop esMVX emissions, lower MP APR to 50% and cap 100% max boost: To enhance the value and scarcity of MVX, we propose to combine the 2 above-presented solutions.

By stopping emitting esMVX tokens, we can prevent additional inflationary pressure on MVX and strengthen its deflationary nature. This decision aligns with our long-term vision for Metavault, it will notably reduce the total FDV as we progress from being a perp DEX to a perp DEX aggregator.

The MVX tokens held in the treasury wallet will be burned if not needed for the above-mentioned updates.

As a result of stopping esMVX emissions, MVX max supply will drop from 10 million to 4 million tokens,

This will drastically reduce the Fully Diluted Value and increase token scarcity.

Income Redemption Mechanism:

In order to provide a possibility to redeem esMVX, Metavault will introduce a discounted redemption mechanism utilizing the income generated by the protocol.

This feature will enable esMVX holders to exit their positions at a discounted price.

Conclusion:

The decisions made through this governance proposal will shape the future of Metavault Trade, ensuring its sustainability and long-term success. We invite the community to provide their valuable input and collaborate on this important decision.

By transitioning to a deflationary model, capping the multiplier point boost, reducing the APR, ceasing esMVX emissions, and reducing MVX max supply from 10 million to 4 million, we aim to establish Metavault as a leading protocol in the industry while prioritizing the best interests of our stakeholders.

Let’s build a sustainable future for Metavault Trade!