Explainer; Emissions Schedule

TL;DR

Explainer guide on KP3R token emission schedule, assuming initial intended weekly caps compared to actual performance to date

Includes details on;

  • necessity of KP3R token inflation
  • original intended inflation targets
  • adjustments caused by circumstance/necessity
  • performance to date

Note; For the purposes of this post, the “Keep3r expansion and consolidation” medium post by Andre Cronje is utilized as the reference point/baseline - specifically the section titled “Keep3r tokenomics v2”

The reference point is taken from date of publication, August 27 2021, to calculate possible total token supply at present

Any member of the team or community is free to suggest additions, corrections or updates.


Necessity of KP3R token inflation

KP3R token supply is inflationary, meaning that there is no cap on max token supply in the design of the tokenomics for the KP3R token

Why?
There are three key needs that are driving an ongoing need for KP3R token emissions;

  1. New KP3R required to rewards keepers working Keep3r Jobs
  2. Incentives needed to encourage deposits to Curve liquidity pools attracting yield seekers (mining liquidity)
  3. Compensating vested KP3R token holders for the dilution caused by the issuance of new supply in 1 & 2

Whilst the third need would be eliminated by implementation of ve(3,3) tokenomics this has not yet been put in place. The first two needs are not anticipated to change and will likely be an ongoing need for the future success of the Keep3r protocols

Original intended inflation targets

At the point that Keep3r Jobs and Fixed Forex were consolidated into a single ecosystem, in late August 21, the tokenomics were addressed as “Keep3r tokenomics V2” with the following features;

  • Keep3r would no longer have open-ended emissions
  • New emissions would be isolated liquidity mints
  • Liquidity mints would gradually decrease over 4 years

Details on rate of decrease were not stated.

A total weekly limit of 4.5k KP3R per week was put into place, with a breakdown provided;

  • Keep3r Jobs V1 = 1k KP3R per week
  • Keep3r Options Liquidity Mining = 1k KP3R per week
  • V3 Liquidity Incentives = 1k KP3R per week
  • Fixed Forex Vesting = Equvilent to 1k KP3R per week (Originally planned to be distributed at the same value as a total of 4k vKP3R per week)

The treasury was also due to receive 1% of all future emissions with the aim to fund future development for the protocol

The treasury also had an optional right to mint additional KP3R for the purposes of farming with treasury funds to sustain future growth

Immediate Changes;
Due to some changes that took place shortly after this announcement. Including the launch of rKP3R & the further announcement that all future rewards would be in the form of rKP3R in Mid-September 21

This included the changes to the above in the following areas;

  • Keep3r OLM - provided as rKP3R rather than KP3R
  • V3 Liquidity Incentives - did not launch
  • Fixed Forex Vesting - switched to rKP3R rewards at 1k rKP3R per week

Additional 1% of emissions directed to treasury were never allocated to treasury

Note; The introduction of rKP3R meant that new KP3R allocated to the rKP3R contract are not a part of the ACTIVE circulating supply of KP3R tokens until the user has claimed via the redemption process. The amount of KP3R allocated to the contract can be checked in real-time on etherscan

Due to additional circumstances, further changes occurred (see below)

Adjustments caused by circumstance or necessity

Olympus Pro Bond Program;
In early December 21 the Keep3r protocol began an Olympus Pro Bond Program that allocated an additional 5k KP3R per week to purchasing LP positions

The program ended on 15th of March 22 with users notified via the unofficial Telegram group

In total during the period 57,000 KP3R were emitted to secure POL

Rewards to vested token holders (vKP3R);
rKP3R rewards to vKP3R stopped on w/c 14th March 22

With rKP3R rewards restored as of 2nd June 22, with double allocation of 2k per week, until payments for the missed period were caught up (i.e. 11 weeks of double payment) meaning the final double payment is due on Sept 11th 22

Rewards to liquidity providers (Curve LPs);
With the introduction of ibXXX + USDC pools a further 2k of rKP3R rewards were promised to the pools when presented to Curve goveranance for approval

As of the restatement of rKP3R rewards to vKP3R from w/c 14th March, a total of 1k rKP3R per week is being distributed to Curve gauges

Performance to date

As of July 15th 22 performance is;

  • Total expected supply (not account for any planned reduction in 4.5k per week emissions) = 446,030 KP3R
  • Actual = 402,533

Difference;

  • 43,497 KP3R lower than expected

Directions for raising additional questions, queries or suggestions

Please use the comments section below to add any new suggestions, or raise further questions or queries.

4 Likes

Nice outlook!

Keeping operations running is essential specially during the bear market, even at the cost of dilluting the token.

However it is not clearly stated how is the protocol going to battle this extra inflation with some price stimulating measure.

The situation is not appealing for both holders and LP unless they can see a benefit on the good performance of the protocol eg. Burning mechanism tied to activity.

1 Like

Yes, it’s true nothing has been published in that respect yet. There are a few options open to the protocol that it hasn’t taken yet + the change to ve(3,3), that is still on the changelog, would greatly help incentivize vesting vs (just) holding.

1 Like