Tokenomics Update

As much as we love infinity vaults and GAMMA Boost, we are experiencing a volatile market where alt-coins are being overshadowed by BTC, and it's time to reflect on our reward system and tokenomics to create a long-term sustainable and profitable protocol for our users.

We took a hard look at Planet's biggest problems and tried to come up with a proposal that addresses most of them.

Challenge #1 - Low Liquidity

• Only ~6 million GAMMA tokens out of a circulating supply of over 65 million are available to be bought from the open market.
• As innovative as the infinity vaults are, they reduce the liquidity of the pools, and having such low liquidity is detrimental to us. Whales may not be interested in investing in the protocol due to the low liquidity.
• It also creates a barrier for people looking to buy GAMMA, as they face a significant price impact when attempting to purchase tokens in large quantities.
• Since GAMMA is the key to unlocking higher rewards on Planet, the inability to easily purchase GAMMA acts as a barrier to entry for the platform as a whole.

Challenge #2 - Large price movements

• Due to the low liquidity in the GAMMA-BNB pool, even small buy or sell orders of GAMMA tokens lead to significant price fluctuations.
• This high price impact is unfavorable for both buyers and sellers, discouraging investors. It also instills fear among investors that their portfolios could drop by 30-40% if someone sells, regardless of utility, for personal reasons or emergencies.
• Moreover, large fluctuations often trigger panic selling among new investors, negatively affecting a token that otherwise serves as a highly utilitarian asset.
• Additionally, maintaining a stable price becomes challenging even with liquidity infusion.

Challenge #3 - Gamma sell pressure

• Despite its utility, the sell pressure on GAMMA is higher than what we believe a token of such utility should have.
• We have come to realize that this is partially due to our lenient reward system, which rewards individuals who don't contribute to the protocol.
• In many of the protocols we surveyed, locking mechanisms require commitments of at least 3 months, with over 50% of tokens locked instantly or even without provisions for instant unlocking. We believe that changes need to be made in this area as well.

Challenge #4 - low TVL growth contributing to low automated buy pressure

• We all know that the more Total Value Locked (TVL) we have in aggregated pools, the higher the automated buy pressure on GAMMA. We have been stagnated a bit for now. This needs to improve.

Challenge #5 - Limited Total Supply of GAMMA

• Since this is a discussion about GAMMA's tokenomics, it would not be fair to skip addressing the question that most of us have - what happens when the supply ends?
• Currently, roughly 9% of circulating GAMMA tokens drip into the reserves, which will help provide rewards once emissions end. However, it would be prudent to extend the emissions and create substantial reserves to sustain a system that can continue providing for itself

Challenge #6 - BNB Chain Volatility

• While we believe that the BNB Smart Chain is relatively safe, we must be prepared for any scenario. Therefore, we are considering launching more GAMMA and AQUA pools once we have increased liquidity. We are also evaluating the expansion to another chain when the timing is right. And planning for an action plan for a black swan event.
• We are also thinking of migrating away from GAMMA-BNB pool to GAMMA-BTCB pool

The solution

One clear pattern emerging from the above challenges is the need for increased liquidity. We must attract new investors by creating an environment conducive to their participation. Additionally, we need to reduce the incentive to sell while building liquidity, gradually decrease the GAMMA drip, and establish a sustainable reserve to perpetuate the cycle of GAMMA.

Gamma Rewards are now limited to users who supply a minimum of 5% of their portfolio to the GAMMA-BNB time-locked pool for a duration of 3 months

• Users who supply 5% of their portfolio to the GAMMA-BNB pool will receive Gamma Rewards. We are evaluating to use GAMMA-BTCB pool instead of GAMMA-BNB. So, this could be a possibility too. Will be putting up a voting for this specifically.
• Those who don't supply 5% will only receive the base rewards, such as trade fees in liquidity pools, borrow fees in the lending market, and parent farm APRs in the aggregated markets.
• For every new user joining Planet, it is recommended to allocate 5% of their portfolio to the GAMMA-BNB Time Locked pool to receive high returns.
• These time-locked vaults are final, meaning that once tokens are locked into them for a specific period, they cannot be removed.
• We will make it easy for users to allocate this 5% while depositing by providing an option to directly zap it into the GAMMA-BNB pool while also providing for other pools.

GAMMA rewards will vest for three months before users can collect them.

• All collected rewards will vest for three months.
• Alternatively, users can stake the rewards into the infinity vault to earn an APY on those rewards and receive a GAMMA Boost for all pools and markets. Infinity vaults have a lock period of 6 months (more options will be available in the future).
  • Rewards can be withdrawn before the lock-in period, but 50% of the rewards will be forfeited as a penalty.
  • Gamma locked in the pool provides a boost across Planet, but vesting rewards do not offer a boost or earn APY.
  • When you supply GAMMA or claim rewards into the infinity vault for a second time, a separate timer starts for that withdrawal, unlike the current system that resets the timer with any change.
  • All penalty charges are sent to the Gamma Reserves, helping them grow as a source to provide Gamma even after its maximum supply is in circulation.

The Gamma drip will be reduced by a certain amount (let's say 10% to start with) every 3 months, with the remainder powering the reserves as a source for future drips.

We like the above solution for the following reasons

• It follows a systematic and incremental approach for new users, providing a linear progression of steps as they familiarize themselves with the platform.
• The locking mechanisms are more familiar to users acquainted with locking in DeFi than our current infinity vault system.
• We believe that making GAMMA-BNB a prerequisite for the rewards system will result in approximately 5% of the Total Value Locked (TVL) being in the GAMMA-BNB pool. This will create substantial liquidity, making it easier for new users to enter and establishing a positive reinforcement cycle that boosts both GAMMA and Planet.
• We believe that stricter rules on the infinity vault will help reinstate and support the true value provided by GAMMA Boost, reducing GAMMA sell pressure significantly.
• Once we improve the reward system and tokenomics as suggested above, make the platform user-friendly, provide a one-stop solution for high yields across DeFi, leverage partnerships, and focus on marketing, we will have the best chance to grow Planet for the benefit of its users.

AQUA tokenomics Change

We would also like to introduce the AQUA-BNB time-locked pool to increase liquidity. This pool will come with substantial rewards.

Additionally, we propose extending the lock period of the AQUA infinity vault to 6 months or a year. We are also considering stopping the burning process and instead airdropping revenues to AQUA infinity vault users (subject to the outcome of the SEC ruling). This change would be more favorable for AQUA holders.

Conclusion

Overall, this proposal has been the result of weeks of research, analyzing various protocols, studying different systems, and engaging in conversations with our users and whales who have explored Planet in the past. It has gone through numerous iterations and refinements. At this point, we believe this method is the best solution, both in terms of simplicity and clarity for users and in terms of sustainability and strength for the protocol. We will ensure new users understand the utility of GAMMA and make their journey easier. Once we achieve this, we are confident that we will experience positive growth.

What does this mean for you? Most of you have already allocated 5% to the GAMMA-BNB pool, and if you haven't, we encourage you to do so. By doing this, you will continue to enjoy the rewards, including GAMMA APR and Boost APR.

For new users, to start earning the best yields on BSC, allocate 5% to the GAMMA-BNB pool, enjoy high rewards, and wait for a bit for the rewards to vest. Alternatively, contribute to the protocol by staking all or part of the rewards into the infinity vault to enjoy double the rewards you would otherwise receive. If you don't want to lock, enjoy the parent farm rewards as is. You still are at a place where you can find best yields with easy to use interface.

We hope that you will join us in voting FOR this proposal! Cheers!