Seal Finance Parameter Governance
Adjustment Roadmap and Seal Monetary Policy
The goal of Seal Finance is to provide better liquidity for the whole DeFi space. To achieve this, we will guide our users by adjusting farming parameters.
Farming Parameters
According to current Seal Finance design, the adjustable governance parameters are:
- New Seal species (Token Pair)
- Seal reproduction rate (APY)
- Withdraw damage to Seal (Withdrawal Fee)
- Time-Lock for deposits
In general, the token economics for Seal Finance encourages people to provide more liquidity. When there are too many free sailing seals in the sea, it may cause price fluctuations to increase, and reduce the willingness of LPs. In this case, we will offset the potential loss of storing farm LPs and encourage these free seals to become LP by increasing the reproduction rate.
https://etherscan.io/token/tokenholderchart/0x33c2DA7Fd5B125E629B3950f3c38d7f721D7B30D
Token Selection
About the selection method of token pairs, we will evaluate its liquidity, trading volume, utility, and whether it is similar to any token we already listed to decide if to include it in the farm.
Adjustment Policy
For token pairs we already listed, we will adjust the parameter according to the daily situations. We hope the LP tokens can be sealed in the system, thus, when users frequently enter and exit the farm, we will increase the lockup period to avoid excessive liquidity fluctuation.
When we encounter a huge demand for withdrawing, our system will be triggered and temporarily increase the withdrawal fee to avoid panic sell from others. Also, the withdrawal fee will remain in the farm and become the profit of other LPs.
In addition to the major Seal token economics, consider the differences of price fluctuations and trading volume (volume also generates fees as a source of interest) of different tokens, we will need to slightly adjust their reproduction rates to stabilize APY from time to time. Same thing would happen when the size of the farm is different, it will be balanced by adjusting the reproduction rate as well.
Near Roadmap
Seal Finance is still in its early stage of development, we need more experiments to accumulate data and create better token economics. When everything becomes stable, the Seal Team will gradually hand over governance to the community, allowing Seal breeders to continue to run Seal Finance system in a decentralized manner.
