AIP #2 - Burn Proposal of the Unallocated SPELL per week!

Burn Proposal of the Unallocated SPELL per week!

tl;dr We are proposing to burn 5.25B SPELL tokens on January 3, 2022. The burned tokens will be coming from a reduction in the weekly emissions of SPELL used to incentivize liquidity.

The Current Situation

Our emission allocation for each farm is adjusted weekly to better follow market dynamics and movements. At the time of writing this article, the protocol currently has a benchmark emission rate of 1,161,501,384 SPELL per week.

This amount is distributed across various farms are as follows:

If you are interested in the exact amounts per farm, make sure to have a read here.

52% of the benchmark amount (currently 610,794,286 SPELL) are “Unallocated”. These tokens are not emitted and are instead kept in the treasury as a reserve in the event we need to add new farms or increase individual allocations.

You can track how many of these tokens are kept in our treasury over the weeks by following our Twitter Profile, where we publish a farm update every week!

Our previous burn proposal, which can be found here, highlighted the possibility of keeping the emissions benchmark steady until May 31, 2022 (1 year from the start of the mining program), resulting in a maximum total emission of approximately 29,037,534,600 SPELL including the unallocated amount.

Given the recent market conditions, the extraordinary adoption that MIM has seen, as well as the deep liquidity that our tokens have across multiple chains and DEXes, we believe that this amount is too high. We are proposing to burn some of the “Unallocated” portion of our weekly emissions.

The Proposal

In order to address this situation, we propose the following:

We will keep emissions steady for the next 4 weeks (i.e until January 3, 2022) emitting a total of 4,646,005,536 SPELL after which we will reduce the weekly unallocated portion by 250M SPELL. If we were to use the current regime as an example, the unallocated emissions would be lowered from 610M SPELL to 360M SPELL.

From January 3, 2022 to May 31, 2022, the weekly emission benchmark will then be lowered to 911,501,384 SPELL per week.
This will result in a total emission in the 21 weeks between January and May of 19,141,529,064 SPELL.

We believe that this amount together with the unallocated tokens from previous weeks will be enough to cover all of the existing and possible new farms until the 31st of May 2022.

This reduction would bring the total amount emitted from now until May 31, 2022 to 23,787,534,600 SPELL tokens, which translates into an overall emission reduction of 5,250,000,000 SPELL tokens.

Given the depths of our reserves and the wide adoption our tokens are experiencing, we feel confident that the incentivisation program is more than sufficiently funded and we are therefore proposing to burn these 5.25B SPELL on January 3, 2022.

Next Steps

The proposal has passed! Find the voting here!

Reach out to us on Discord or replying to this post if you have any questions!

57 Likes

2013hank

16 Likes

Will borrowers of the sSpell cauldron be able to participate in the vote?

5 Likes

I agree, this is good.

5 Likes

If you think it’s the way to improve just burn it
You should change it to x-mas day to keep the house warm :slight_smile:

5 Likes

This is a good proposal as I expect the emission rate to decrease even further as we adopt PSM and increase MIM supply

3 Likes

Further concur, great idea.

2 Likes

Would like to know this too. I believe a lot of sSPELL holders have cauldrons opened. Are we allowed to vote?

2 Likes

See “Next Steps” section at the bottom of the proposal, looks like sSpell holders will be able to vote.

2 Likes

An important & meaningful initiative/proposal. Thank you team. If possible, are you able to articulate what price implications might the proposal have on spell (ceteris paribus)? Many thanks again for all you guys do. K

2 Likes

If I have LP token of sSpell-Spell on TraderJoe. Am I eligible to vote?

1 Like

I agree, this would be a nice holiday gift for everyone, consider changing the date to DEC 25th

2 Likes

Agree. This is a great idea – let’s do it!

1 Like

Extra $SPELL roasting over an open fire
Popsicle $ICE nipping at your nose
Yuletide carols being sung by a Frog
And Dani keeps shipping with no back logggggg

I say you burn the extra allocation even with another 5 billion burn we would be just under 100b Spell in circulation at the end of the distribution.

4 Likes

This is a good way to keep revenue in the green and keep SPELL less inflationary. Let’s do it

4 Likes

Excellent proposal, let’s start calling Romy by his given name: MR. BURNS.

Mr-Burns-Saying-Excellent

1 Like

Rekam approves. send it

Love it! Agree completely, emissions don’t need to be so high now that MIM is becoming well-established and SPELL is starting to pop up on major CEXes

Yes. This is one giant step!

Sounds like Frog Nation has a good plan

2 Likes