Vladislav Sopov
Legendary DeFi token introduces streamlined LP rewards model that’s more decentralized and fair, says its chef
contents
- Longer Bans, Bigger Rewards: New rules for SushiSwap LPs and xSushi holders
- New issuance schedule for predictable margin
SushiSwap (SUSHI), a key decentralized protocol of DeFi summer 2020, may be completely rethinking its token model for native asset SUSHI. SushiSwap CEO Jared Gray shares details and rationale for his proposal.
Longer Bans, Bigger Rewards: New rules for SushiSwap LPs and xSushi holders
According to the Sushi Tokenomics redesign proposal shared by Tate on the Sushi.com forum, the protocol could change the principles of reward distribution for Liquidity Providers (LPs) and xSushi payouts.
I’m happy to share @SushiSwap’s vision for the new token model. I posted a short tl;dr report on the sushi forums and linked the whole suggestion. We welcome your questions and feedback.https://t.co/D9TO2Oi8ra pic.twitter.com/GBrQKPzfiH
— Jared Gray (@jaredgrey) December 30, 2022
LPs receive bonuses from the 0.05% swap fee, while the bulk of the rewards are distributed to the most active pools. To increase rewards, LPs can lock them. Meanwhile, LPs will lose rewards if removed before they are due.
XSushi community members receive issuance-based rewards and can also freeze them in “soft locks”: collateral can be removed before it is due, but the rewards will disappear:
xSushi will receive emission-based rewards in time-bound tiers. Longer locks get more rewards
Also, a floating swap fee percentage of 0.05% will drive a buyback program aimed at removing SUSHI tokens from the circulating supply.
The actual percentage changes based on the total number of time-locked levels selected.
New issuance schedule for predictable margin
The SushiSwap team will also launch a price support program: a portion of the 0.05% swap fee will be dedicated to this initiative.
Gray has stated that the team will target a 1-3% nominal APR on issuance to maintain a balanced supply during all buybacks and token burn events.
As previously reported by U.Today, SushiSwap (SUSHI) became a premier DeFi protocol in 2020 as it siphoned liquidity from Uniswap (UNI) by offering better yield farming rates.
In 2022, new leadership of the platform introduced SushiSwap 2.0, the roadmap of an updated protocol. As of December 2022, it is the #11 DeFi protocol by network activity with $454 million locked across multiple blockchains.
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