[ARBITRUM] XVS Emissions adjustment proposal

Summary

This proposal recommends adjusting XVS emissions on Arbitrum by reducing them by 25%. This will be the first adjustment for the Arbitrum Core Pool, and the reduction will be based on an analysis of TVL. The analysis details and recommendation are as follows:

Details Considerations All prices and market TVLs are considered for Sept 18, 2024

TVL Analysis The TVL participation for each market is analyzed to filter out the most significant markets. The goal is to identify markets that hold a significant portion of the total TVL and categorize them into two tiers.

Tier 1: Markets with more than 5% in TVL Tier 2: Markets with less than 5% in TVL The following table shows the TVL participation:

Recommendations All markets in the core pool have significant participation. Therefore, as this is the first emission adjustment, the recommendation is to apply a unified 25% reduction across all markets. The market’s response will be evaluated, and further actions will be taken to fine-tune the optimal settings to support the growth of the Arbitrum deployment.

This proposal requests XVS funding to support these incentives until January 2025. Additionally, XVS funding for the LST pool will be requested to extend rewards until January, ensuring synchronization of both emission adjustments and funding calendars. The required amounts per distributor are as follows: