XVS Emissions Adjustment Across All Chains

Summary

This proposal outlines a further reduction in XVS emissions across all supported chains, applying the same reduction percentages as the previous proposal. The goal is to continue optimizing emissions while maintaining alignment with market use cases and performance. Below is a summary of the proposed changes:

Chain	Current Emissions (XVS)	New Emissions (XVS)	Reduction (%)
ZKSync	4,230	2,451	42%
Arbitrum	3,825	1,969	49%
Ethereum Mainnet	13,595	7,575	44%
BNB Chain	16,943	11,905	30%
Total	38,593	23,900	38%

A VIP will be required to implement these changes, modifying the reward distribution speeds on all chains to match the new emissions if approved by the community.

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Funding Request

To support the new emission levels for 3 months, the following funding is requested for ZKSync, Arbitrum, and Ethereum Mainnet (BNB Chain is excluded as XVS is already available there):

• ZKSync:
  • New emissions per month: 2,361 XVS
  • Total funding for 3 months: 7,083 XVS
• Arbitrum:
  • New emissions per month: 1,339 XVS
  • Total funding for 3 months: 4,017 XVS
• Ethereum Mainnet:
  • New emissions per month: 5,438 XVS
  • Total funding for 3 months: 16,314 XVS

Total funding requested for 3 months: 27,414 XVS

Details

Reduction Strategy

The reduction strategy applies the same percentages as the previous proposal, ensuring consistency in the approach:

• ZKSync: 44% reduction
• Arbitrum: 65% reduction
• Ethereum Mainnet: 60% reduction
• BNB Chain: 30% reduction

Supply and Borrow Incentives

The allocation of emissions between supply and borrow incentives will remain unchanged, focusing on the most relevant use cases for each market:

• Non-Stablecoin Markets: Emissions will focus on the supply side to incentivize collateralization.
• Stablecoin Markets: Emissions will focus on the borrowing side to support borrowing positions.

XVS Vault

A 30% reduction will be applied to the XVS Vault across all chains, consistent with the previous proposal. This gradual reduction allows for continued evaluation of user behavior and further adjustments in the future.

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Tables for Each Chain

ZKSync

Pool	Market	Current Allocation (XVS)	Reduction	New Allocation (XVS)
Core	ZK	630	30%	441
Core	ETH	600	50%	300
Core	BTC	600	50%	300
Core	USDT	450	50%	225
Core	USDC.e	900	50%	450
Vault	XVS	1,050	30%	735
Total		4,230	42%	2,451

Arbitrum

Pool	Market	Current Allocation (XVS)	Reduction	New Allocation (XVS)
Core	ARB	239	75%	60
Core	WETH	239	75%	60
Core	WBTC	319	50%	160
Core	USDT	479	75%	120
Core	USDC	479	75%	120
LST	ETH	1,020	30%	714
Vault	XVS	1,050	30%	735
Total		3,825	49%	1,969

Ethereum Mainnet

Pool	Market	Current Allocation (XVS)	Reduction	New Allocation (XVS)
Core	WETH	475	75%	119
Core	WBTC	949	50%	475
Core	USDT	1,709	75%	427
Core	USDC	1,709	75%	427
LST	ETH	3,713	30%	2,599
Vault	XVS	5,040	30%	3,528
Total		13,595	44%	7,575

BNB Chain

Pool	Market	Current Allocation (XVS)	Reduction	New Allocation (XVS)
Core	XVS	900	25%	675
Vault	VAI	2,813	30%	1,969
Vault	XVS	13,230	30%	9,261
Total		16,943	30%	11,905

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Supply and Borrow Emissions Distribution

The distribution of emissions between supply and borrow rewards will remain unchanged, as outlined in the previous proposal.

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Note on Uniswap Rewards

Due to the recent addition of new chain rewards in Uniswap, these rewards will be evaluated and adjusted at a later date, following the Uniswap reward proposal. This ensures that emissions remain aligned with market conditions and performance.

Recommendations

The proposed adjustments aim to further optimize XVS emissions while maintaining consistency with the previous strategy:

1. Reduce total emissions by 45%, applying the same proportional reductions as the previous proposal.
2. Align emissions with use cases: Continue focusing on supply rewards for collateral markets and borrow rewards for borrowing markets.
3. Maintain the 30% reduction for XVS Vault emissions to evaluate user behavior and adjust as needed.
4. Ensure flexibility to reassess emissions based on future market conditions and data.

This proposal builds on the success of the previous adjustments, ensuring a sustainable and efficient emission strategy for XVS.