ALEX Governance Proposal: Nakamoto Release Emissions Adjustment

Proposal Summary: ALEX emissions are currently scheduled to halve at cycle #200. To ensure that farming yields for key pools continue to be attractive post Nakamoto upgrade, we propose:

• Delay of emission halving to cycle #300
• Redistribution and consolidation of emission around farming pools that are systemically important to ALEX
• Temporary pause of emission, from one week before the Nakamoto upgrade to one week after the Nakamoto upgrade, to allow for a smooth transition

Delay of Emissions Halving

The ALEX Lab Foundation anticipates the Nakamoto upgrade, scheduled for April, will be the beginning of a new era for Stacks and for ALEX.

The Nakamoto upgrade will reduce Stacks block times from Bitcoin block times of ~15 minutes to ~5 seconds. This will be transformational for the ALEX user experience and is exceptionally important for DeFi applications.

In volatile crypto markets, every second counts when swapping tokens and post Nakamoto upgrade we anticipate significant users growth and retention. Halving at cycle #200, which should occur 4–6 weeks after the Nakamoto upgrade, risks decelerating ALEX’s momentum during a critical transition period.

That is why we recommend the delay of emissions halving for approximately 1 year, until cycle #300, so our community can adjust to post-Nakamoto Stacks without concerns about emissions reduction.

Redistribution and Consolidation of Farming Pool Emissions

The ALEX Lab Foundation recommends adjusting farming pool emissions to better align farming rewards with pools that are systemically important to the ALEX protocol.

The principal tokens of the ALEX ecosystem are: $ALEX, $atALEX, $STX, $sUSDT and $aBTC. Emissions should be focused on pools that incentivize holding and providing liquidity for these tokens and their respective pairs.

Temporary Emissions Pause One Week Before and After Nakamoto Upgrade

The ALEX Lab Foundation recommends a temporary pause in emissions from one week before the Nakamoto upgrade to one week after the Nakamoto upgrade.

The Nakamoto release is a significant change to Stacks protocol and the pause is a precautionary measure to help ensure a seamless transition. Farming cycles will continue to be based on Stacks block heights.

How Will Delay of Emissions Halving Effect the ALEX Emissions Schedule?

The ALEX tokenomics published in December of 2021, during our testnet, allocates 50% of the ALEX token supply, 500M of 1B, to community token emissions. This allocation remains unchanged.

Total emissions in practice have been well below the capped amounts on our tokenomics paper. This provides our community flexibility in determining what future emissions will be. In this proposal, year 3 emissions will reflect year 2 emissions. Emissions in year 4 and beyond will be determined by governance vote of our community of token holders.

Conclusion

The Nakamoto upgrade will be the most significant event to occur on Stacks since Stacks 2.0 mainnet in 2021. This governance proposal is designed to ensure we capitalize on this singular opportunity to grow our community and retain new ALEX users.

We believe this is best achieved through delaying the emissions halving, refocusing emissions on systemically important tokens and ensuring a smooth transition by temporarily pausing emissions.

We leave the final decision to our community of $ALEX and $atALEX token holders.