TIP 40 - Improving LON buyback mechanics and pausing LON minting（关于LON 回购方案优化和暂停铸币的提案）

Background

• The Tokenlon protocol captures fees through the open market and conducts regular weekly buybacks of the LON token. The buyback LON is allocated to the community treasury and LON staking rewards on a 3:7 ratio. In addition to this, a 1:1 minting is initiated based on the number of LON bought back, which is used for trade mining rewards.
  • Extensive community feedback shows that the current fixed cycle LON buyback operations presents arbitrage opportunities and have areas for improvement. E.g. when the token price decreases, the buyback efforts should be appropriately increased.
  • Currently, the buyback can be more organically integrated with the Tokenlon protocol to enhance protocol value.
• As an application-oriented governance token of the Tokenlon protocol, LON has a hard cap total issuance of 200 million LON as outlined in the white paper, with the current total minted amount being 139 million LON.
• According to the community vote result of TIP 39, the unclaimed 9,892,722 LON tokens in the Tokenlon genesis airdrop contract have been transferred to the community treasury wallet.

Objectives

• To communicate the current issues with the community and build consensus on adjustments to the LON economic model.
• To adapt to market changes and update the LON buyback plan to improve the efficiency of utilizing the transaction fee funds of the Tokenlon protocol.

Proposal

• Adjust the LON buyback from a regular weekly buyback to a more flexible and non-linear irregular buyback based on market movements.
• Reduce token issuance. The LON minting ratio will be paused and adjusted from the current 1:1 to 0️⃣. According to the community vote from TIP 39, the source of LON rewards for trade mining will be changed to the unclaimed 9,892,722 LON from the genesis airdrop (with an estimated total reward pool of 500,000 LON for each round of trade mining, which can support approximately 19 rounds). The decision to resume minting will be made later, taking into account the development of the Tokenlon protocol and changes in the market and the community.
• The distribution of LON in the trade mining reward pool will be adjusted to occur at the end of each round of trade mining, based on the proportion of the total reward pool captured from the transaction fees.
  • 30% to the community treasury
  • 35% for trade mining rewards (the distribution ratio for Tokenlon users and market makers remains unchanged)
  • 35% for LON staking rewards

Execution

• If the proposal is approved, the team will stop the additional minting of LON and will implement a more efficient buyback strategy based on market fluctuations through irregular buybacks.
• According to the community vote of TIP 39, the 9,892,722 LON from the genesis airdrop will serve as the source for trade mining rewards.
• We are actively exploring new on-chain buyback solutions for LON, and in the future, the buyback and the Tokenlon protocol will have a deeper and connected relationship.

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背景

• Tokenlon 协议捕获的手续费通过公开市场，每周定期进行 LON 的回购操作。回购的 LON 按照 3：7 的比例，分配给社区财库和 LON staking 质押奖励，同时按照回购 LON 数量开启1:1 铸币，用于交易挖矿奖励
  • 在广泛收集社区反馈后发现，当前这种固定周期的 LON 回购操作，存在一定的套利机会和可优化之处，例如，当币价下跌时，应该适度加大回购力度
  • 目前回购的动作，可以和 Tokenlon 协议有更多有机结合，赋能协议的价值捕获
• LON 作为 Tokenlon 协议的应用型治理代币，按照白皮书规划，硬顶总发行量 2 亿 LON，当前总铸币发行量 1.39亿 LON
• 根据 TIP 39 的社区投票结果，Tokenlon 创世回溯空投合约中未认领的 9,892,722 枚 LON 代币，已转入社区财库钱包

目的

• 和社区沟通当前问题，凝聚 LON 经济模型调整共识
• 适应当前市场情况，更新迭代 LON 回购方案，以提高 Tokenlon 协议手续费资金的利用效率

提案

• LON 回购从每周定期回购，调整为根据行情波动情况，更机动灵活的非线性不定期回购
• 减少代币增发，LON 铸币系数从现在的 1:1 ，暂停铸币调整为0️⃣，根据 TIP 39 的社区投票，交易挖矿的 LON 奖励来源，改由创世回溯空投未认领的 9,892,722 LON 发放（每轮交易挖矿总奖池 50w LON 推算，预计可支持19 轮左右），后续将综合考量 Tokenlon 协议发展和市场社区变化等情况，再择期恢复铸币
• 交易挖矿奖池的 LON 分配，调整为在每轮交易挖矿的期末进行，每期捕获的手续费回购的 LON 总奖池分配比例
  • 30% 社区财库
  • 35% 交易挖矿奖励（Tokenlon 用户和做市商的交易挖矿奖励分配比例不受影响）
  • 35% LON 质押奖励

执行

• 若提案获得通过，团队将停止 LON 的新增铸币，并根据行情波动情况，采取不定期回购的方式，更高效地执行回购 LON 的策略
• 依据 TIP 39 的社区投票，由创世挖矿回溯空投的 9,892,722  LON ，作为交易挖矿奖励的来源
• 我们正在积极探索新的 LON 链上回购方案，未来回购和 Tokenlon 协议会有更深的绑定和赋能