Reducing emissions to ensure a vibrant community

noah-sark

Current emission levels of ALCX tokens are very high. We have the highest stablecoin yield anywhere currently. We are earning 900% per year on DAI. While this will hopefully be good for ensuring a fair distribution, I believe the current inflation schedule outlined here is too high and similar to that of Curve. The Curve emissions have been quite detrimental to their community because they have a constant downward pressure on price. I feel like this is what will happen to the Alchemix community as well. Whether we like it or not price is significantly correlated to quality of community around a project.

I am hoping to start a discussion around reducing emissions to their final level of 2200 ALCX per week faster than initially planned. I am proposing decreasing the amount of ALCX emitted each week by 1300 instead of 130. This will reduce emissions to 2200 ALCX/week over a period of 18 weeks. I also understand the values held by the treasury DAO and bug bounty program will need to be altered to account for this reduce in emissions.

KriptoHayat

Why is everyone trying to change emissions? This is not a priority.

noah-sark

Simply because incentives are not strong to hold the token, people will see this as a quick entry and exit if we do not change emissions. In my opinion it is the highest priority. Everyone farming on any pool are incentivised to dump their tokens quickly if they look at the emissions schedule. It will create very negative price action over the next few weeks/months where initial believers get diluted and dumped on instead of rewarded for being here and being a part of this project. If those people can see the large part of the emissions coming to an end over a period of weeks/months instead of years, then we can probably keep those people around. Otherwise they will probably leave.

n4n0

Hey sorry I did a fucky wucky; the AIP section should only be open to moderators/admins to post new entries and for members to discuss them. I moved this into open talk so y'all can continue discussing this freely 😀

AlleyCat

I don't think we should change the emissions schedule. It's actually quite low when you scale it out over the next 3y as designed. Emissions are front loaded so it seems like they're high now but over the next 3y it averages out to about 2185 tokens per day. By the end it's down to about 285 tokens per day.

scoopy

The reason why we designed this emission schedule is to support the issuance of several al-Tokens in the future (alETH, alBTC, etc). If the rewards drop off a cliff now, we will be hamstrung going into the future.

Furthermore, such a rapid reduction will concentrate the ALCX holders to the early farmers. We'd rather have a strong distribution of holders, and believe the current emissions rate is the best course of action to achieving these goals.

MarkoB

I get where noah is coming from. Bigger emission does anchor the price towards bottom. Thing is bull market wont last forever and it should be priority for project to get highest possible Mcap as this also leads to higher usage, more credibility more awarness etc, Project that is under 100Mcap is not really popular and to be top project you need at least 1B now. Curve has big emission and it is struggling to get into top tier although it should be there by mcap. On the other hand you have projects like Cardano that still dont do much but beacuse of the high mcap last bull run and some good community building and marketing got even higher in this one and that does help the project in many ways. You got to play the game and develop good projects, that is road to success, leaving one out is often fatal.

It also looks to me emission is too big and because everyone know this people farming sell the tokens right away, that is what we do with curve, that is what we do with barnbridge and that is what is anchoring those projects to lower prices. People knowing this will also tend to not invest in token as they know this is the case and in the end it all plays out in a circle hindering growth of token value.