Proposal #1: veREAX Token Emission Rate Capping [Finalized]

Proposal Overview

This proposal suggests implementing a cap on the veREAX token emission rate to 1 veREAX per second. This decision is aimed at establishing a sustainable and controlled tokenomics framework, providing a clear direction for the REAX ecosystem, and addressing the uncertainty regarding reward rates. The proposal also recommends setting the annual token emission at approximately 34 million REAX tokens to maintain a balanced and predictable issuance of tokens.

Rationale

When REAX was initially launched, the reward rates were set arbitrarily due to the lack of a structured tokenomics plan and uncertainty regarding the number of reward pools. As the project has evolved with structuring tokenomics and a clearer vision has been established, it's essential to set token emission rates to ensure long-term sustainability, prevent excessive inflation, and maintain the economic viability of the REAX ecosystem.

Proposed Changes

Cap veREAX Token Emission Rate: Implement a cap on the veREAX reward emission rate at 1 veREAX/second to

• Regulate the creation of new tokens,
• Maintain a stable and predictable future token supply.

Annual Token Emission Target

Set the target for annual veREAX token emissions at approximately 30 million tokens. This will strike a balance between incentivizing participation and ensuring a controlled token issuance.

Current State

The current emission rate for veREAX is arbitrarily set around 1.275 tokens per second.

REAX Tokenomics

In our tokenomics, we have reserved 25-30% of REAX tokens for Ecosystem Rewards, subject to an 8-year vesting period. Allocating 34 million REAX tokens to this purpose equates to approximately 3.4%. This strategic allocation is significant, particularly in the first year, as it plays a crucial role in driving the growth of any protocol. However, it's important to note that this reward rate is designed to decrease in subsequent years to ensure sustainability.

Implementation Details

To enact the proposed changes, the following steps should be taken:

Smart Contract Modification: Update the relevant smart contract governing the token emission mechanism to enforce the new emission rate cap of 1 veREAX token per second.

Parameter Adjustment: Adjust the smart contract parameters to ensure compliance with the proposed annual token emission target of approximately 30 million veREAX tokens.

Community Communication: Inform the veREAX community about the proposed changes, their rationale, and the intended benefits. Collect feedback and address any concerns or suggestions before implementing the changes.

Voting Process: Conduct a formal on-chain or off-chain voting process among veREAX token holders to gauge community support for the proposed emission rate cap and annual emission target.

Execution: Based on the outcome of the voting process, execute the necessary modifications to the smart contract and tokenomics parameters to reflect the agreed-upon emission rate cap and annual emission target.

Timeline

The proposed changes should be implemented as soon as possible to align with the project's long-term sustainability goals. The following timeline is suggested:

• Community Feedback and Revision [25 Sept - 5 Oct]: Within the first 10 days of proposal submission.
• Voting Process [5 Oct - 15 Oct]: Initiate the voting process and allow a 15-day voting period.
• Implementation [15 Oct]: Begin the implementation of the approved changes immediately after the voting period.

Conclusion

Implementing a token emission rate cap and setting an annual emission target is crucial for maintaining a sustainable and thriving veREAX ecosystem. By taking these steps, we can ensure a balanced issuance of tokens, fostering confidence and stability within the community. Your support for this proposal is highly appreciated as we work towards a prosperous future for REAX and its stakeholders.