MODA Staking and LP Rewards
While the MODA community forms, products begin to roll out and as governance takes shape, the early community must be rewarded for their involvement. Being involved early in a project means taking on risk via opportunity cost. Let’s look at how MODA members can be rewarded by staking MODA or by providing liquidity for the project.
The rewards program
The MODA launch team have modelled a pre-launch staking and rewards program that we believe will be beneficial towards growing the size of the community, increasing liquidity and distributing tokens for governance.
Taking a look at various staking programs, we chose to model closely from Illuvium.io and the distribution of the $ILV token. The Illuvium tokenomics are proven, simple and attractive. Ensuring that early participants are rewarded well without excessive sell pressure. The program consists of:
- Basic staking rewards for MODA members
- Claimable rewards mechanism to ensure thoughtful token management
- LP rewards for members who are deeper in crypto and understand the basics of DeFi
- Flexible lockup periods to adjust individual risk vs reward profiles
Basic staking rewards will mean locking up MODA for a period of time, and claiming rewards as they build up over time. The tokens will vest after a period of time, most likely 6 months (as opposed to Illuvium’s 12 months vesting)
LP rewards will attract higher APY than regular staking, designed to reduce the risk associated with liquidity providing and impermanent loss. Again, the rewards tokens will vest after a period of time, most likely 6 months. The LP rewards program is currently design to work with SushiSwap SLP tokens whereby holders must stake both MODA and Ethereum inside of SushiSwaps AMM trading contract and then lock the MODA SLP tokens for a period of time.
A vesting period is activated each time rewards are claimed, this vesting period means that the MODA rewards will be claimable 6 months after the claim date. This mechanism helps to ensure that the participants are involved in MODA because of their support for the project, love of music and vision for Music3; not just as a way to farm tokens.
APY and the emission curve
APY will be calculated along a curve, with more rewards in the beginning, gradually reducing as the project matures. These rewards are designed to taper off gradually over 3 years.
In the longterm, MODA will explore the possibilities of token buy-back and distribution to keep the rewards pool full overtime. Additionally, new mechanics may be introduced where your MODA stake can also support your favourite artists, and in return attract rewards in the form of NFTs or artist tokens. In any case, as the DAO matures and becomes an increasingly bigger part of the Music world, the need for passive forms of reward are reduced.
MODA DAO Staking and LP Rewards are being finalised currently, round 1 has been through Certik review and round 2 is being submitted this week. The User Interface has been built and is currently in testing. With Christmas and New Year holidays just around the corners, we expect the testing and audit to be completed in early January and live before the end of January.