Plutons!
Approximately two months ago we publicly communicated our plan to completely revamp our tokenomics. Phase One consisted of rebalancing and cutting emissions, and over the past months we’ve been doing extensive tokenomics research and subsequently designing a model that increases the utility of PLS and encourages platform adoption.
We’re at a point now where we’re comfortable with sharing the details of our implementation, which has been designed with solely one purpose in mind — give PLS as much utility as possible. This implementation will be Phase Two of our tokenomics revamp.
We’ve taken inspiration from some of the best tokenomics in the business while sprinkling in our own sauce to ensure that the new features are completely aligned with driving value to the PLS token while simultaneously increasing platform usage. The new design encapsulates much more than simply bribes, making PLS not only useful but absolutely necessary throughout our entire product line.
Without further ado, let’s jump into the details!
Locked PLS (lPLS)
Locked PLS is at the core of our tokenomics design. Locked PLS will not only earn bribes, but also multiplier points, esPLS and boosting powers across the entire Plutus ecosystem. Users can choose to lock either PLS or the PLS-ETH LP for lPLS. Users that lock the PLS-ETH LP get 10% more lPLS.
We project that once governance goes live for many of the projects under us, bribes will play a significant part in driving income to lPLS. As for lock timing, we’ve decided on a familiar model — the 16-week lock. The 16-week lock will be automatically recurring if a user does not end a lock that is in progress.
If the lock is ended, a user can withdraw their PLS at the end of the ongoing 16-week lock. Users can also add to their existing stake whenever (this resets the lock timer) and choose how much they want to withdraw. This enables some much-needed flexibility for users.
Plutus Multiplier Points (PMP)
Users with lPLS will earn MPs at a rate of 50% APR. When a user withdraws, these disappear proportionally to the amount withdrawn. This creates a mechanism where users are incentivized to keep their PLS locked and earning multiplier points. In our system, multiplier points function as additional lPLS. This creates a virtuous compounding cycle for those that stay locked in the system and keep generating MPs.
Escrowed PLS (esPLS)
Locked PLS will always have a target APR (final target APR TBD). We expect most of this APR to come from bribes when the time is right, however, to make up for any shortcomings, users will be able to earn esPLS in order to always reach the target APR.
Escrowed PLS vests over a one-year period, acting as additional lPLS during that time. In order to vest esPLS, users must continue re-locking their lPLS. Escrowed PLS is a central mechanic in our design, as it creates stability and most importantly predictability for users in terms of estimating potential rewards.
Plutus Boost
Borrowing inspiration from Curve, the Plutus Boost is an exciting new mechanic which is designed to reward lPLS lockers that use our products. Users that lock lPLS will enable a boost on their rewards on all of our plsAsset staking and vaults. As a user’s % of lPLS owned increases proportionally to their % of TVL in a vault, they will achieve boosted rewards.
The max boost will be a whopping 2,5x multiplier on a user’s rewards. This won’t increase total rewards in an inflationary manner, but rather increase a user’s weight of rewards compared to other users. This means that lPLS lockers will be able to earn significantly more rewards than they do currently, while mercenary capital will be severely penalized. Let’s look at an example of a user looking to earn boosted rewards.
Example 1.
A user owns 50% of the TVL of the plvGLP vault. In order to get the max boost, that user must own 50% of all lPLS. This means that whales get no advantage over smaller players, as they need to proportionally own the same % of lPLS as their TVL. This ensures a level and fair playing ground for all!
This also introduces a significant and clear reason to buy, own and lock PLS. Users looking to maximize rewards should look to accumulate and lock as much lPLS as possible.
Conclusion
The second phase of our tokenomics will soon introduce massive changes not only to the utility of PLS, but also to how our platform operates. The design decisions we’ve made have been driven by two core factors — aligning PLS with platform usage and increasing the utility of PLS.
The changes will heavily reward PLS lockers through the introduction of several use-cases outside of simple bribes. In our new model, PLS is now vital to own and lock to ensure maximum rewards from using Plutus. This update will soon be delivering a monumentally positive change to how PLS works — we’re extremely excited about this new design, and we hope you are too! If you have any questions, please pop into our Discord to chat and learn more.
