[PIP-13] Adjustment of Protocol incentives

[PIP-13] Adjustment of Protocol incentives

Motivation: Driving protocol adoption remains one of the most important priorities for Pine with V3 of the protocol being progressively rolled out. Adoption is crucial to the Pine’s mission to build a long term sustainable operation. As a result, starting with PIP-3, incentives to borrowers and lenders has been active, with over 2,000,000 $PINE rewarded to active users of the platform, liquidity providers, and token holders. With changing market conditions, we believe that it is important to reevaluate the emissions of rewards. Hence this proposal explores a reduction in the amount of weekly rewards given out..

Specifications: The initial specifications provide 104,000 $PINE from the Incentives pool as reward for protocol usage each week, 104,000 $PINE a week for LP stakers, and 45,000 $PINE each week for $PINE stakers and burners. The distribution of tokens can be found within the official Pine Protocol Docs. The proposal is to reduce the incentives of future epochs to be in line with the following specifications.

The proposal is to reduce weekly emissions of rewards from 249,900 $PINE a week to 65,700 $PINE a week.

Staking and Burning Incentives

Incentive structure will remain the same as current specifications.

LP Staking Incentives LP Staking Incentives will be reduced by 80%, from 104,000 $PINE a week to 20,800 $PINE a week

Borrowing and Lending Incentives Borrowing and Lending Incentives will be reduced to 0 $PINE a week, while a new system is created in order to better align protocol incentives with protocol growth.

Conclusion: Incentivizing users to participate in different activities on Pine Protocol has increased the platform’s adoption and usage, ultimately making the operation sustainable. At the same time, ensuring emissions of incentives are in-line with protocol usage and adoption are also crucial. This proposal aims to bring the current weekly emissions to be more in line with current market conditions and protocol demand.

Copyright: Copyright and related rights waived via CC0.