PSDN Emissions Update
The POSEIDON ($PSDN) token emissions and tokenomics were designed in April of 2022, when the market was different to say the least. A lot has changed over the past year, and we understand that there is a need to create an adaptive model based on reality, rather than one operating on false assumptions.
Due to the changes in the rewards & distribution model for our main partner — Ocean Protocol, as well as some future endeavors of H2O Protocol (stay tuned — we are actively cooking in the background), we are adapting the emissions of $PSDN to bootstrap the liquidity, remove additional selling pressure and benefit $PSDN long-term.
Previously we were emitting 1514 PSDN on a weekly basis. Transaction example here.
psdnOCEAN/OCEAN LP: 500
psdnOCEAN Single Sided: 400
PSDN Single Sided: 150
H2O/USDC LP: 364
PSDN/ETH LP: 100
The fees generated by the protocol come from Ocean Data Farming rewards right now. The price of $PSDN was around $1.5 and $OCEAN was around $0.3. Given the limited OCEAN Rewards generated on a weekly basis due to a number of different reasons, the Treasury Fee that was taken by the protocol (3% of OCEAN Rewards) was basically operating uneconomically. Therefore, there was a need for a new emissions model that would benefit the protocol as well as the $PSDN long-term.
New Model:
The new model is going to be based on the following 3 rules.
- Emissions to the LP — PSDN/ETH are fixed at 100 PSDN weekly at the moment, as we will be focusing on PSDN tokens going forward, meaning that we need to keep the pool liquid. The APR on the pool is planned to be above a certain threshold to cover for the impermanent loss, ceteris paribus.
- Emissions to other vaults/pools are no longer fixed — they will be calculated by the model:
P(o) & P(p) are prices of $OCEAN and $PSDN respectively.
3. The following breakdown of the rest:
psdnOCEAN/OCEAN LP: 30%
psdnOCEAN Single Sided: 45%
psdn Single Sided: 25%
H2O/USDC LP: 0%
(Bear in mind that we are not changing the tokenomics (yet…) but we are changing the emissions. For now, there will be no DAO vote. In future, when the tokenomics change is proposed, a DAO vote will be completed.)
Example for DF20: We have generated — 11,023 $OCEAN as a protocol. By formula above, 46 $PSDN will be distributed, (round up):
psdnOCEAN/OCEAN LP: 14
psdnOCEAN Single Sided: 21
psdn Single Sided: 12
H2O/USDC LP*: 0
*- protocol is taking a step back with $H2O stable asset at the moment, re-optimizing focus on Liquid Staking Derivatives therefore emissions are going to be lowered to that pool.
We understand that this change is quite significant but we want to ensure that $PSDN is a fundamentally strong governance token of H2O Protocol. The Protocol team believes that this is a step in the right direction. Stay tuned. We keep building. 🚀
