Improving Token Utility & Building an Operational Token
Following the Alpha launch, the team has continued to monitor community feedback, and as a result, have prioritized our focus on increasing token utility; granting more options and power to $APY token holders in a way that is both compliant and beneficial.
Over the past few weeks, we’ve been evaluating many possibilities for increasing token utility with our recently onboarded Data Scientist. We’ve analyzed options such as a bonding market mechanism and creating an insurance fund through a portion of yield received to insure against a shortfall event.
Ultimately, we’ve decided that creating a more holistic approach to token utility and moving toward developing the token as an operational token, where it is used for all facets of platform operation, will open many more exciting opportunities for contributing, supportive, and active token holders to earn rewards. What does that mean exactly?
There are 4 areas that we believe a cohesive operational token should grant token utility, and we plan to continuously increase token utility in each of these areas over time. We believe moving toward a structure where a portion of yield will be set toward incentivizing token utility rewards will increase token utility, decentralization, and compliance simultaneously.
The 4 key areas in which we plan to increase token utility are:
- Governance
- Liquidity Provision
- Risk-management
- Platform operation
While we already have basic token utility for both governance and liquidity provision, we are continuing to ideate on ways they can be expanded. Ultimately, we’re planning to start by increasing basic utility options for each of these pillars and continue to increase depth and complexity for them over time. For instance, we believe there are options to expand governance through vote-locking, where users can earn rewards by locking and committing their tokens to strictly voting for a set time period and actively participating in proposal votes. Further, while we already have a liquidity provision system in place, we are continuing to explore options to expand liquidity depth here with Olympus DAO’s bonding market mechanism and Gelato G-Uni.
There is also room to begin implementing token utility in areas we haven’t explored yet, namely risk management and platform operation. An example of possible platform operational token utility may be granting permission to certain users, who have a certain amount of $APY tokens bonded, to perform certain platform operational tasks, and earn rewards for doing so.
Further, we can implement token-utility through implementing risk-management measures such as a stability treasury, where users have the option to lock up a portion of their tokens for a certain period of time and earn rewards. In the case of a shortfall event, a portion of the locked tokens would be liquidated to cover the shortfall event. This gives users the option to stake their $APY tokens for rewards.
Ultimately, the plan to increase token utility is underway. We are progressing toward shifting the utility of the token from strictly granting governance voting powers, to a more holistic token that covers all aspects of platform operations. This will allow token holders who are contributing value to the platform to earn rewards for their support and contribution, while providing different avenues of doing so, depending on a user’s preferences.
We appreciate your continued feedback and support as we continue to take APY.Finance to the next level.
Check out the newly deployed active strategies and begin yield farming now: APY.Finance
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