| Header | Content |
|---|---|
| Author | Ermin @_ermin |
| Created | 2024-07-22 |
| Status | Draft |
Motivation
dHEDGE first launched in 2020 and has since found market fit with various integrations and automated vault strategies built on top of the protocol. Current dHEDGE TVL is above $100M. This growth has been a direct result of expanding the protocol to meet DeFi user needs.
Therefore, it is no longer necessary for dHEDGE to inflate the DHT supply to incentivize users to use the protocol.
DHT Staking V2 is the only current source of DHT inflation. However, it has not been a significant contributing factor to dHEDGE TVL.
In particular, pairing DHT staking with vaults such as the DHT Staking vault and the DHT Liquidity Yield vault does not add real value or revenue to the protocol. The dynamic is that as DHT increases in price, these staking positions inflate the DHT supply, counteracting any positive fundamentals on DHT.
DHT Staking can instead in the future capture real value generated by the protocol.
Description
This proposal reduces DHT emissions from Staking v2 over the next 3 months to 0 by removing Staking v2 DHT emissions.
Staking v2 can continue to exist purely for governance of the protocol. In the future, a separate proposal can consider capturing protocol revenue by the stakers, including staking length multipliers, etc.
Implementation
Immediate reduction of the staking rewards multiplier from 1 to 0.5 (new stake rewards are halved).
Immediate increase in the vault performance required to maximize the potential multiplier for new staking positions.
Current setting: 50% vault performance to maximize rewards
New setting: 100% vault performance to maximize rewards
In 3 months, stop any further DHT emissions from the Staking v2 contract.
Any stakers that wish to claim DHT rewards, should do it prior to this event.
Stakers can still stake and be active in governance, but will not receive any further DHT inflationary rewards. DHT staking can be simplified to be just a simple DHT deposit where voting power increases over time without the need to pair it with a vault token.
In the future, a separate proposal can consider capturing protocol revenue by the stakers.