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Another long thread on @dextfprotocol and its new #tokenomics
https://governance.dextf.com/#/dextfprotocol.eth/proposal/QmaaQkHt6SqVRur3qrzSLeCmSF37EXxjzgTxWSHW1Tjtgz https://twitter.com/krugermacro/status/1359748215738884096
https://governance.dextf.com/#/dextfprotocol.eth/proposal/QmaaQkHt6SqVRur3qrzSLeCmSF37EXxjzgTxWSHW1Tjtgz https://twitter.com/krugermacro/status/1359748215738884096
But before few links to resources that can be useful
First a thread by the team on how to participate to APY https://twitter.com/dextfprotocol/status/1358026618573254658?s=20
First a thread by the team on how to participate to APY https://twitter.com/dextfprotocol/status/1358026618573254658?s=20
Then one to complement this on LP and Impermanent Loss https://twitter.com/Be1garat/status/1357486663576993793?s=20
And one or #arbitrage as a substitute to #oracles and it's positive implications https://twitter.com/Be1garat/status/1356848326193385478?s=20
And also one to remind everyone that @dextfprotocol is also a Structured Note protocol, the first to my knowledge
And this is an opaque USD5 trillion market with fees that reach 10% https://twitter.com/Be1garat/status/1345265142330662914?s=20
And this is an opaque USD5 trillion market with fees that reach 10% https://twitter.com/Be1garat/status/1345265142330662914?s=20
And finally one specific for Floored Tokens which could be interesting for those who are worried of a correction https://twitter.com/Be1garat/status/1346075981597925378?s=20
Now on the tokenomics
My TLDR is
1. Shift of rewards from PM to Investors
2. Shift of rewards from providing liquidity against ETH to DEXTF
3. Simpler rewards
4. Smaller total distribution and lower inflation
And I welcome all as they create nice Feedback Loop
My TLDR is
1. Shift of rewards from PM to Investors
2. Shift of rewards from providing liquidity against ETH to DEXTF
3. Simpler rewards
4. Smaller total distribution and lower inflation
And I welcome all as they create nice Feedback Loop
On the first point, until now the @dextfprotocol team incentivised LP to increase the liquidity of DEXTF token which is good and incentivised PM which worked well with hundreds of funds https://twitter.com/joker_on_chain/status/1359618112467984389?s=20
But now it's time to incentivise Investors!
Investors are the foundation of an Asset Management protocol, a strong community of investors will create natively enough incentive to support the whole project even when APY will eventually drop
Investors are the foundation of an Asset Management protocol, a strong community of investors will create natively enough incentive to support the whole project even when APY will eventually drop
The first Feedback Loop (FL1) that I want to highlight is
APY to Investors
More Investor
More TVL
Higher Price
Higher APY
More Investors
APY to Investors
More Investor
More TVL
Higher Price
Higher APY
More Investors
The Portfolio Managers (PM) rewards have been reduced, but I would argue that they should be happy anyway
Mostly ppl were re-packaging their own holding and getting APY on it
This behaviour should not be particularly incentivised, unless other ppl also like those holdings
Mostly ppl were re-packaging their own holding and getting APY on it
This behaviour should not be particularly incentivised, unless other ppl also like those holdings
As a PM myself, I would rather have 50% APY on 10x my personal AUM as compared to 250% APY on my portfolio
I would need to do a good job and attract investors
So I also like that half of the PM rewards come only for performance!
Quality over quantity!
I would need to do a good job and attract investors
So I also like that half of the PM rewards come only for performance!
Quality over quantity!
So FL2
Better PM
Higher Performance
More Investors
see FL1
Higher AUM for the good PM
Higher PM APY
More and better PM come to DEXTF
Better PM
Higher Performance
More Investors
see FL1Higher AUM for the good PM
Higher PM APY
More and better PM come to DEXTF
Then there is the Liquidity Mining
First there is no change to the rewards for the DEXTF-ETH-LP
But there is a change (strong) in incentive from LP-ETH to LP-DEXTF
I welcome this change too as it creates a nice sink for $DEXTF tokens
First there is no change to the rewards for the DEXTF-ETH-LP
But there is a change (strong) in incentive from LP-ETH to LP-DEXTF
I welcome this change too as it creates a nice sink for $DEXTF tokens
And also because it implies a shift where ppl will need to sell ETH (proposed APY at current size of 50%) to buy DEXTF (proposed APY >2000%)
At current sizes this shift is 100-200% larger than the total liquidity in DEXTF which means direct positive price impact
At current sizes this shift is 100-200% larger than the total liquidity in DEXTF which means direct positive price impact
FL3
Higher $DEXTF price
Higher APY for everything see FL1 + FL2
increase TVL see FL1
higher price for $DEXTF
Higher $DEXTF price
Higher APY for everything
see FL1 + FL2increase TVL
see FL1higher price for $DEXTF
But also this implies a large volume shifting on DEXTF pairs which makes the main ETH-DEXTF pool more attractive which means that the distribution can drop without affecting incentive and this lower inflation and improve pricing
Finally higher rewards for LP means more liquidity in the pools, this in turn lower slippage and improves arbitrage returns (see article above). And more arb mean more fees for LP and lower tracking error which in turns means better funds
FL4
Bigger LP on Funds
Lower slippage
More Arbitrage better funds more investors FL1
more volume
more returns for LP
bigger LP
Bigger LP on Funds
Lower slippage
More Arbitrage
better funds more investors FL1more volume
more returns for LP
bigger LP
Finally total token airdropped is slightly lower (I think around 15% lower if my calcs are right) and more delayed which has a direct positive impact on price
So as all changes to complex systems, this will need to be tweaked but it seems to me all the changes lead to positive feedback loops and I welcome all of them
That's why I will vote yes
That's why I will vote yes
I would love the feedback of
@krugermacro
@mattysino
@MapleLeafCap
@variantfund
@MechanismCap
@Arthur_0x
@KenrickLuneX
@QwQiao
@YanLiberman
@Shaughnessy119
@Delphi_Digital
@MessariCrypto
@twobitidiot
@cburniske
@DavidKChuenLEE
@aliatiia_
@arca
@krugermacro
@mattysino
@MapleLeafCap
@variantfund
@MechanismCap
@Arthur_0x
@KenrickLuneX
@QwQiao
@YanLiberman
@Shaughnessy119
@Delphi_Digital
@MessariCrypto
@twobitidiot
@cburniske
@DavidKChuenLEE
@aliatiia_
@arca
For now it seems 6% voted and all positive
taking bets on success of the proposal
taking bets on success of the proposal
One more interesting thread https://twitter.com/1stCRYPTOKING/status/1347578639257374721?s=20
