gm Plutons,
We’re mere days away from our token generation event with our flagship product launching soon after. If you haven’t yet, this is the perfect time to catch up on our Plutus Article Series on our Medium here. We’ve got two more pieces lined up for you guys — in this one we’ll dive deep into $PLS tokenomics, emissions and liquidity mining while also re-capping the unique value proposition of $PLS and plsAssets. In the final article we’ll detail our vision and subsequent roadmap for the future.
Let’s dive right in!
$PLS Liquidity Mining, Platform Rewards & Emissions
From the perspective of understanding our tokenomics and emissions schedules correctly, it’s important to note the difference between liquidity mining rewards (15% of total supply) and platform rewards (35% of total supply). $PLS liquidity mining rewards are one of the ways we’ll use to incentivize the growth of Plutus’ governance moat rapidly by directing the majority of these emissions to plsDPX & plsJONES single stake and LP rewards. The rest of these emissions are directed to incentivize the PLS-ETH LP. With the focus of building a governance moat quickly we have set up the liquidity mining emission schedule to emit less PLS every month (30 days). This heavily favors early minters of plsDPX & plsJONES as they’ll be enjoying increased PLS emissions.
As for platform rewards, Plutus frontrunning the implementation of veDPX, veJONES and the accompanying boosted Jones pools means that a total of 35% of PLS tokens allocated for platform rewards will be set aside initially. Once boosted pools are implemented we will tune the distribution model to Jones emission schedule and allocate the platform rewards to incentivize users to stake their Jones LPs with us. With plans to distribute the PLS platform rewards pro-rata based on the amount of JONES users earn through boosted pools on Plutus we can’t give an exact emissions schedule at this point in time but our plan is to design it in a way where these rewards are distributed over the course of ~18–30 months.
To summarize — we’re intentionally being very flexible with the platform rewards and depending on the specific implementations of veJONES and veDPX will look to find an equilibrium for the usage of platform rewards that’s most beneficial to Plutus accumulating the most possible veJONES and veDPX.
The bonding and operational allocation buckets will be used strategically to benefit Plutus’ growth where necessary. The importance of retaining flexibility cannot be overstated. A good example of a balance between flexibility and set emissions is the Dopex team, that is creatively using the DPX operational allocation to incentivize usage (e.g. bootstrapping ETH SSOV deposits with additional DPX emissions).
The Plutus Productive Treasury will also be used to build out initial positions in projects we find align well with the goals of Plutus. One direct way we have to build out new and existing positions in our productive treasury is through non-rebase bonding which we have allocated 10% of our supply to. We will bond out this PLS to accumulate strategic yield generating assets as necessary with an emphasis on using the funds to develop positions across the most impactful projects on Arbitrum and build a robust portfolio that entrenches Plutus itself within the ecosystem. While there is no set emissions schedule for these funds we are limiting the bonding of this PLS to 0.5% of the total supply each month, so if we bonded the full 0.5% out each month the funds would be distributed over the course of 20 months. However we do not plan to bond out any PLS in the early months so just because the supply is available to be bonded does not mean we will be bonding it out.
$PLS Emissions Schedule
Until platform rewards start to get distributed, the primary source of PLS emissions will be from the 15% of supply allocated to liquidity mining rewards, with private TGE (4.2%) and team (12%) token unlocks beginning 3 months after the public TGE. The liquidity mining emissions schedule is designed so less PLS tokens are distributed each month. In month 1 there will be 825,000 PLS distributed across the PLS-ETH LP, plsDPX LP, plsJONES LP, plsDPX Single Stake, and plsJONES Single Stake vaults. The liquidity mining emissions structure favors early users who mint plsDPX+plsJONES and stake as well as those who contribute by providing liquidity for others. This is designed to develop a governance moat and add to the underlying value of the PLS token. These liquidity mining emissions will be distributed over the course of 24 months and each month the total PLS distributed from our liquidity mining emissions will decrease by 17,391 tokens.
We’ve graphed out both monthly and cumulative emissions below. As mentioned above, the usage of operational allocation and platform rewards will be strategic and highly dependent on veDPX and veJones final implementations and mechanics. Therefore these are not reflected in the below charts since they are impossible to accurately forecast at this point. However, these will be used sparingly over the future and in a way that makes sense for the growth of the Plutus ecosystem.
Liquidity mining emissions will be divided among Plutus ecosystem users with the following weights. These are designed to incentivize the minting of plsAssets and their respective LP’s in order to ensure a strong peg.
- PLS-ETH LP — 330,000 PLS (40%)
- plsDPX LP — 185,625 PLS (22.5%)
- plsDPX SS — 165,000 PLS (20%)
- plsJONES LP — 82,500 PLS (10%)
- plsJONES SS — 61,875 PLS (7.5%)
Our plans are to set up a Curve pool within approximately one month for our plsDPX and plsJONES LPs. During this waiting period we will direct the liquidity mining emissions that would go towards incentivizing those LPs the first month to the plsDPX and plsJONES single stakers instead. This will significantly enhance the APR for plsDPX and plsJones single-sided staking on Plutus for the first month.
*Please note this omits platform rewards and operational allocation*
Power of the $PLS Token and plsAssets
Dopex and Jones are slated to control the on-chain options space and their accompanying governance tokens, $DPX & $JONES, are the key for users and DAOs to be able to benefit from their success and influence these projects in their favor. This influence will require users to lock their assets for extended periods of time to receive veDPX and veJONES, which is where Plutus comes in. Plutus will aggregate veDPX and veJONES, always max locking to ensure the largest amount of voting power. The governance power of both $DPX and $JONES will be controlled by the $PLS token.
For example, through the $PLS token a user will be able to set strikes on Dopex and direct Jones gauge rewards which have a symbiotic relationship. Users will be able to set the strikes they want on Dopex vaults and then drive liquidity to those vaults by directing Jones gauge rewards to that vault’s accompanying jAsset LP. There are numerous additional and valuable use-cases that Dopex and Jones governance enable. For a full run-down of what we know so far, check our previous article on “The Value Proposition of Aggregating Governance in the Dopex Ecosystem” here.
Alternatively, a user may find they alone don’t have enough voting power through $PLS to meaningfully control strikes or gauges, or they may simply not care to, and instead can sell that $PLS voting power to the highest bidder via bribes. $PLS will have its own set of benefits beyond just voting power over Dopex and Jones. A portion of Plutus’ platform fees from boosted Jones vaults, Dollar Maxi Vaults and some possible unannounced features will be distributed to $PLS lockers. In addition to this, Plutus will direct a portion of yield from the Productive Treasury to $PLS lockers.
With the Productive Treasury composed primarily of Dopex and Jones assets the treasury will scale with the success and growth of Dopex and Jones themselves which adds a reflexive mechanism to the value of the $PLS. The yield $PLS lockers receive plays an important part in the flywheel of Plutus as the DPX and JONES will be converted to plsDPX and plsJONES prior to distribution from the Productive Treasury. This means the veDPX and veJONES voting power controlled by $PLS holders will continually increase as long as our Productive Treasury is being strategically utilized for yield and our vaults are being used. Promoting full transparency, we also want to give an update on how the rewards from Plutus’ treasury will be divided amongst Plutus users. As initially stated, 50% of the yield will be compounded back into the treasury while the other 50% of yield is distributed between single staking PLS, plsDPX, and plsJONES. Of the treasury yield distributed, 50% will be allocated to PLS single staking, 30% to plsDPX single staking, and 20% to plsJONES single staking.
Below you can find an example with concrete figures.
- Treasury generated $1,000,000 in the prior month
- $500,000 is compounded within the treasury
- $500,000 is distributed to users
- $250,000 (50%) to PLS stakers
- $150,000 (30%) to plsDPX stakers
- $100,000 (20%) to plsJONES stakers
An important aspect of the value prop behind $PLS is building a moat of governance power that forever entrenches Plutus as the de facto Dopex and Jones governance aggregator. This moat will naturally grow over time through the underlying mechanisms, but it’s important to be proactive and incentivize the minting of plsDPX and plsJONES as much as possible. The most clear cut path towards this goal is ensuring plsDPX and plsJONES rewards are greater than their accompanying single stake/vote escrow rewards. We have a few ways of ensuring this. There will always be a surplus of single stake/vote escrow DPX and JONES rewards going to plsDPX and plsJONES stakers.
How? First, after the TGE we will take a portion of deposits and seed the plsDPX and plsJONES vaults, simply put that means depositing DPX and JONES without minting plsDPX and plsJONES. For example, if we seed it with 100 DPX there will always be 100 more DPX in the vault than there are plsDPX in circulation. Second, we will incentivize a plsDPX-DPX LP and a plsJONES-JONES LP. This will allow users to swap in and out of plsAssets but it also means that not all plsAssets will be receiving single staking rewards.
For example, if there are 1,000 plsDPX in circulation and 150 plsDPX are staked in the plsDPX-DPX LP that means the 850 plsDPX that are single staked will be receiving the rewards for 1,100 veDPX. From a fundamental perspective the yield on plsDPX and plsJONES will always be greater than the yield on veDPX or veJONES but we have a way to make it even more enticing. Third, a portion of the Productive Treasury yield will be distributed to plsDPX and plsJONES single stakers as well and this yield will scale with the Productive Treasury. As the treasury grows larger through compounding, fees, bonding, and DPX/JONES price appreciation the yield Plutus generates and in turn distributes will increase. Fourth, plsDPX & plsJONES stakers will receive PLS emissions through our liquidity mining rewards which plays a part in the flywheel itself — users who stake plsDPX & plsJONES earn PLS which they can stake to earn more plsDPX & plsJONES.
Conclusion and Next Steps
Plutus is on track to become a powerful player in the Dopex ecosystem through aggregating governance power, enhancing yield and significantly deepening liquidity. Through carefully designing the tokenomics to serve all parties in the Dopex ecosystem, we feel extremely confident moving into launch and beyond. The core methods we are using borrow some of their mechanisms from Convex, however our own innovations on top act as rocket fuel for our flywheel. A great example is the Plutus Productive Treasury, which scales with ecosystem growth and where a significant portion of yields are rewarded to $PLS lockers and Plutus users.
The Plutus Productive Treasury in and of itself is a core product to Plutus and the growth and management of it will be important for the success of Plutus. When all PLS has been distributed, the Productive Treasury, fees and the growth of the Dopex ecosystem will be the engine that continues powering Plutus. We’re really looking ahead and playing the long game — no unsustainable emissions models. Phase one is fueled by emissions and phase two will be driven through fees, yields and our products coming into maturity. Until then fostering growth and a resilient treasury is of the utmost importance.
We hope this piece has shed light on how we’ve designed our tokenomics and emissions to best serve the Plutus platform and charge its flywheel. We’re extremely close to launch now and everything is right on track and proceeding exactly as planned — be on the lookout for our final article and more information on launch!
If you have any questions at all in mind, hop into our Discord today on the 24th of April for a Community AMA Call at 2pm EST / 6PM UTC. As a reminder, our public token generation open for everyone runs from the 28th of April 18.00 UTC to 2nd of May 18.00 UTC.
