We would like to engage in constructive discussion with the community regarding further reduction of inflationary rewards.
In addition to the 90-day 80 Million VKR token burn that began on December 23rd, 2021, we are looking to further decrease the token supply through an aggressive burning this spring.
We believe that the bloated inflationary rewards are harmful to the development of the protocol, and create a negative impact on the token’s performance. By reducing inflationary incentives, we expect that a significant percentage of the sell pressure caused by inflation will be reduced, ultimately enhancing the Valkyrie Tokenomics.
While the exact burn details and proposals will be further announced, we would like to suggest an initial reduction of at least 80 million VKR, which roughly falls in line with the decrease ratio similar to other protocols within the Terra ecosystem. This reduction will affect both governance and LP pool rewards.
As done previously, a portion of the burn will go to the community pool, while the remaining will be used to create Valkyrian Pass (VPs) to reward those who are loyal users of the Valkyrie Protocol.
By reducing the inflationary rewards, we hope to achieve two things:
- Relieve sell pressure and improve token performance
- Align token incentives with positive user behavior by rewarding long term holders with VPs
We seek the community to vote positively on this proposal.
I completely agree with this - also discussed in telegram.
I think a distribution chart to show emissions (before and after) this change would help the community to visualize and come to a decision. Although even without it, I think it is a no brainer to go ahead with this proposal.
Its more to do with the tokenomics than quantity of coin. For a protocol that is designed to promote and launch protocols it seems you are an advertising hub for poor performing projects. There is poor online visibility across platforms too.
You cant just capture value with poor performance.
Burning more might achieve some gains but hard work will get more.
Really apologise if this comes across harshly not my intent, just my thoughts here.
I think continuing to reduce inflation is a good goal and I’d vote in favour of that.
I agree with kissmyaxe76 that the Valkyrie issues aren’t fixed by adjusting emissions. I know there has been a lot of work on campaigns behind the scenes but it hasn’t necessarily shown so far.
There is a lack of buzz around VKR, which is exactly the opposite of what you want for a token meant to generate social buzz for other campaigns. I don’t pretend to have all the answers and how to achieve that again. But I think there needs to be an overarching plan to bring that buzz back with measurable goals - which in my mind needs really good execution on multiple desirable campaigns with AAA protocols. If that can be done, VKR will be in good shape regardless of tokenomics IMO.
Completely agree with the need to ‘generate social buzz’. I spoke about this with Ryan on the telegram chat at length the other day.
So, the way I look at it, in Valkyrie early days when it was going viral, influencers were shilling non-stop on twitter, and VKR campaign was being shared everywhere on every group in telegram.
For a web3 referrals protocol to work, we need to integrate with web2 social media. Kujira is a good example - after they integrated their twitter campaign, that one post went viral having something like 4000 retweets.
If we can somehow integrate twitter/telegram on-chain onto our campaigns - that would generate the much needed buzz for valkyrie and its campaigns. I’m in like 100 different group chats on telegram, and on twitter I never see ANYONE sharing any valkyrie campaign. The only exposure from campaigns is from Valkyrie twitter account - and we all know that is lacklustre.
Thank you everyone for the constructive feedback. We will be moving this motion to a governance poll, so please vote here:
The details of this new revision will be as follows:
Recall that at TGE:
- 30% for LP rewards
- 10% for Governance rewards
In December, we passed a motion for a linear reduction VKR LP and Governance staking rewards by a total of 100M VKR ( 25% reduction ) over 4 years
- LP incentives: 300M → 225M
- Governance incentives: 100M → 75M
With this proposal, we are looking to a further linear reduction of 50% over 4 years.
- LP incentives: 225M → 112.5M
- Governance incentives: 75M → 37.5M
Therefore, there will be a total reduction of 150 million VKR.
The burn will be used to create more VPs which will be awarded as loyalty program rewards for active participation in upcoming campaigns.
So does this mean that VP accrual for gov stakers will be more than 2x the current rate? Or this new VP is earnable through other means?
One of my concerns with such a deep cut of community emissions is that this changes the final distribution of VKR where previously Team/investors 200m and LP/Gov for the community was 400m and now it will be 200/150 ratio which is a pretty massive change.
Agree. If reduction only applies to the future inflation, the early investors or foundation will be the ones that benefit most.
If a room for future participants is to decrease, early participants’ share will be dominant forever with no effort discouraging potential new comers. As a result, higher probability that it gets less decentralized.