Update emissions schedule to bootstrap a treasury and create a long-term liquidity mining program to ensure that the protocol can stay competitive over the long-term.
Currently, Rari’s issuance stops at the end of the sixty days of liquidity mining. There were 10,000,000 $RGT distributed over this period. At the time of writing this, more than 5% (500,000) have been burned. While the viability of burning is questioned later in another proposal, I see value in having long-term issuance that delivers value to token holders over time.
My proposed emissions plan lasts five years and proposes the creation of 10,000,000 new $RGT (+100%). The new tokens will go to two distinct places: the Community Treasury and Liquidity Incentives. 70% of the new supply will be used to bootstrap the Rari Community Treasury (managed by the DAO of token holders) whereas the next 30% will be used for liquidity initiatives.
70% - Community Treasury
- 20% - Rari Capital
- 50% - Remaining
30% - Liquidity Initiatives
- 7.5% - First Year Liquidity Program
The Community Treasury will be built with the mission: to further the Rari Protocol on all fronts. The pursuit of these goals will be facilitated by the DAO, or rather, token holders.
This proposal also aims to allocate 2,000,000 $RGT of the Treasury to the Rari Capital team to continue as a developer of the protocol. This 28.57% of the Treasury will be delivered to the Rari Capital team on a quarterly basis for the next five years following the same rate of emissions (33% in the first year, 26% in the second year, etc). Since it is being delivered on a quarterly basis, governance can stop the spend at any time if they deem that the Rari Capital team is not justifying their value. The Rari Capital team is expected to continue their work on various fronts: creating new strategies, pushing governance forward and accruing value towards the ecosystem. The rest of the assets in the Treasury is at governance’s discretion for deployment.
The Liquidity Initiatives will all be built with the mission of: to increase liquidity of the Rari Token and further incentivize deposits within the platform. This piece of the proposal is independent from straightup liquidity mining incentives which aims to increase liquidity using burnt tokens.
I propose for 750,000 $RGT to be taken from within the Liquidity Initiatives to be deployed in the First Year Liquidity Program. This directs incentives for: basic depositors and stakers. Depositors will be eligible to earn 33.33% of the First Year Liquidity Program rewards. These will reward depositors for entering into any of the pools (based on fiat amount proportional to TVL), similar to the previous Liquidity Mining program. The staking rewards will be 66.66% of the 750,000. These staking rewards are incentives for locking RGT and UNI-LP: RGT-ETH. If no relevant staking proposals pass, the portion delegated to staking will be merged into the basic deposit rewards, then representing 100% of the initiative. This program will last twelve months but may be renewed at governance’s discretion.
We begin with 33% of the new supply being distributed across the first year but the rate of increase slows down after the first year. By the final year (Year 5) of the plan, only 750,000 new $RGT are made. We feel that there is value in decreasing emissions over the five years. It is important to understand how this affects the token distribution as it stays true to our effort of having a community-owned protocol. The original founding team is getting diluted along with everyone else while the Rari Capital team will begin maintaining the rest of the protocol. A large advantage of the new voting system ensures that early participants don’t hoard all of the tokens and thus the voting power. Again, we’d like this to be a community-owned protocol.
You can view all of the charts (for inflation and also how the distributions will be affected) and data outlined here:
In crypto, emissions or rather inflation can be thought of as taboo, maybe because the central banks did such a horrible job with it. However, it can provide net value to the ecosystem as I believe it will here. It will be able to incentivize new users, promote protocol growth, and lay the foundation for the Rari Ecosystem, as managed by the DAO.
The long-term emissions schedule will be the start of the Rari Ecosystem by pioneering the Rari Community Treasury. This treasury will be deployed in ways to provide exponential returns to RGT holders through smart investments and by bootstrapping future supplemental protocols.