DIP-8: vDEUS redemptions & $DEUS rewards emission structure

Please note that the contents of this article are subject to change based on future votes and protocol decisions.

On June 19th, a community proposal was put forward as a solution to tackling the upcoming emission structure for vDEUS payouts. vDEUS is an NFT awarded to users who redeem their $DEI, with a delayed $DEUS payout down the road.

This proposal was debated back and forth with members of the community offering their feedback and insights, which were all considered and weighed, helping formulate a final plan that considers the protocol’s health while still honoring the $DEUS debt owed to $DEI redeemers.

Overall, the proposal was received positively, with the majority of the community in support. We will now outline the actions that will be taken, the exact conditions and changes, and what it means for $DEI redemptions.

The plan going forward

Pegging $DEI back to $1 remains our main priority, so all factors discussed in the proposal have been weighed with this in mind. In the next ~3 months we will be redeploying with a 95% USDC backing and showcasing the DEUS v3 testnet.

vDEUS staking

Users that have already redeemed or holders that plan to redeem their $DEI via the redemption page within the DEI app will be able to stake their NFT DEUS vouchers (vDEUS) in one of three different staking contracts: A 3-month lock with a 10% APR, a 6-month lock with a 20% APR, and a 12-month lock with a 40% APR. The APR is calculated based on $1 DEI. The staking contract assumes a $DEUS price floor of $40, meaning that if the DEUS price drops below that at any point, the factual APR will be lower.

Go here to stake vDEUS, and here if you need a guide.

vDEUS payouts

The reward emission structure is designed to limit the influx of new emissions into the system while at the same time honoring the rewards for $DEI redeemers.

Emissions will begin at a certain $DEUS price threshold, halting if the price dips below that threshold, and emissions will increase or decrease depending on the $DEUS price. It will work as follows:

Once the $DEUS price crosses $250 and remains above the threshold for 3 consecutive days, 2% of DEX liquidity will be emitted. At this point, all users (regardless of the locking period) will be able to unstake their vDEUS to begin the redemption process. As the $DEUS price crosses further thresholds, the emissions will increase. The price thresholds are $250, $500, $750, and $1000 with emissions increasing from two to five percent as the thresholds are reached.

The emission structure is outlined in the graphic below.

veDEUS conversion

After 3 months, any user, regardless of their locking period, will have the option to convert their vDEUS to a 4-year veDEUS position. The user will then no longer receive APR from vDEUS staking.

Risk management council

A risk management council will be formed as an extra layer of protection and vigilance against possible vulnerabilities and oversights. As new products and services are brought to market, this think tank will be responsible for thoroughly examining any potential risks of all applications, with the health of the protocol as its main priority.

Key takeaways

  • Repegging DEI remains a priority
  • A ~3-month development period is required to implement and build further repeg measures and the v3 testnet.
  • Users can stake for 3, 6, or 12 months and earn 10%, 20%, and 40% APR respectively.
  • Users can unstake after the locking period has concluded or once the $DEUS price exceeds $250 for 3 consecutive days.
  • After 3 months, all users will have the option of converting their vDEUS to a 4-year veDEUS position.
  • A risk-management council will be formed to offer an additional layer of protection against potential oversights and vulnerabilities

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