[Governance Proposal] Reduce Inflationary VKR Rewards (Suggestion)

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The proposal to decrease in the VKR inflation rewards [Governance Vote #2] has passed and will be executed on DEC 04, 12:55 AM (UTC). The core Valkyrie team proposes the following schema for reducing the inflationary incentives:

  1. 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

  2. 100M VKR will be redirected to the following:

    • 80M VKR to be burned to create Valkyrian Passes
    • 20M VKR to be immediately moved to the Community Pool

What are Valkyrian Passes?

In order to create a deflationary cycle for VKR tokens, the Valkyrie team is proposing to introduce the Valkyrie Loyalty Program, which will feature Valkyrian Passes. Valkyrian Passes are exclusively for Valkyrians who have staked onto governance for a considerable amount of time or in volume. Valkyrie Loyalty Program offers priority access and other offers to IPC, Smart Airdrop and other campaigns. Users for VP will include early/guaranteed participation to protocol token offering and Smart Airdrop events.

  • The Valkyrian Pass is the Valkyrie Loyalty Program ticket that can be created by permanently burning VKR
  • The 80M VKR will be initially burned to create 8M Valkyrian Passes that will be airdropped to VKR governance stakers over a period of 4 years

CONCLUSION

  1. Reduction in VKR sell pressure through:

    • Incentivization of VKR Governance staking
    • Permanent burn of VKR for Valkyrian Passes
    • Reducing overall staking rewards in the form of VKR

  2. Reward loyal members of the community who hold their VKR

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I am concerned there is no discussion about this proposal yet.

It is very hard to know how to vote with so little information about Valkyrian Passes. And sending more to the community pool - why? There is already 20% tokens in the community pool, what will it accomplish to send 20M more VKR there?

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I have to say, I agree with this. There were some decent suggestions in the previous thread but nothing here.

How many VKR tokens need to be burned for a Valkyrian pass?

I also feel like the whales that I know are buying in big at the moment, not for long-term holding but because they want to farm and dump the token. This coupled with the model of giving away tokens for campaigns without any real long-term value in holding the tokens (past the lock-up) means we are in this situation.

Following the theme of POL, can I suggest that the protocol purchases some of the tokens from protocols that run campaigns with VKR? Then that moves to a pool that distributes income to the Valkyrian Pass holders?

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The Valkyrie Pass is used for the Valkyrie Loyalty Program.
Valkyrie Protocol will expand its campaigns in the future, such as very attractive IPC and Smartsir drop.

valkyrian pass is

  1. It will be a condition for entering IPC, Smartairdrop.
  2. Valkyrie Pass will be provided to the governance stakers in proportion to time and quantity.
  3. Valkyrie Pass will be issued by “burn” of reduced incentives.

Of course, the execution and method of the Valkyrian Pass will be finalized after discussion with the community at a later date.

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As mentioned above, for the Valkyrian Pass, we will burn it as follows to secure it.

  1. We will quickly burn 80M of the reduced amount of LP, governance incentives to secure them.
  2. And 20% of the campaign rewards must be purchased in VKR by the campaign creator (protocols).
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