Hi KP3R dev team,
Creating this post to address ongoing & unresolved query regarding rKP3R rewards for vKP3R token holders. I’d like to request that the dev team provide clarity to the community on current status of rKP3R rewards
To make this post as clear as possible I’m including some context around history of rKP3R rewards & some commentary why this is considered an important issue for vested token holders
Importance to vKP3R token holders & reward info
The KP3R governance token includes a tokenomics model where there is no maximum supply cap for the token.
Although necessary for securing ongoing funding & incentives for both protocols & keep3rs in the keep3r network this does create a disincentive for any token holders considering the option of vesting their token holdings who have to consider the risk of dilution as a result of new token emissions - a particular concern since a vested token holder also has a right to a share of the fees generated by the protocol.
This effectively means that the vested token holders have two ways in which their share of fees can be reduced (outside of protocol revenues declining);
- The total amount of tokens in circulation increasing at a rate beyond expectation
- The total amount of token holders locking via vesting mechanism increasing
One way in which this risk was offset was the Options Liquidity Mining program which had the following characteristics;
- rKP3R rewards would be granted to vKP3R holders - tokens which currently offer a 10% discount on the price of KP3R tokens when redeemed via payment in USDC
- the entire revenue generated via redemption (i.e. all USDC payments) would be directed to vKP3R holders as revenue paid out bi-weekly alongside all other fees
This is a key benefit for token holders that chose to invest & a unique selling point of the Keep3r protocols since it effectively compensates vested token holders against dilution of their position by monetizing the new token creation process and providing fees directly to vKP3R as well as allowing each vKP3R holder to increase their overall holding at a discounted rate - ensuring that they have an opportunity to maintain a similar level of claim on protocol fees.
In respect to this post, we should consider these as aspects that have driven token holder behaviour when choosing to vest their tokens for a period of upto 4 years in length. Average token lock duration is currently sitting at a little over 3 years
As already shared in my previous post total emissions of new KP3R have already exceeded the expected rate by around 8k more KP3R in circulation than anticipated by the point in time that the Olympus Pro Bond program came to an end. This has further impact on vested token holders that is being exasperated by the fact that rKP3R rewards to vKP3R stopped as of w/c 14th of March
rKP3R rewards to vKP3R were running at a rate of upto 1k per week which is confirmed in this message from the moderator team of the official telegram group & were distributed to vKP3R holders weekly prior to this point in time
Under the previous communications channels it was also clarified by Andre that rKP3R rewards for vKP3R holders would stop upon implementation of ve(3,3) tokenomics . Although it now appears rKP3R rewards stopped whilst ve(3,3) has not been delivered as of yet - this is an important point since ve(3,3) would further address the concerns about dilution for vKP3R holders
It’s clear at this point that the intent is to continue with rKP3R rewards to curve gauges for the foreseeable future which would further impact vested token holders in the ways described above
Conclusion & Ask of keep3r team
Please can the dev team look into this query and provide a responses that address;
- whether rKP3R rewards to vKP3R holders have been stopped intentionally or whether this is an oversight?
- if an oversight, whether rKP3R rewards will be backdated for vKP3R holders to week of 14th March?
- if restored, what new rate of weekly allocation to vKP3R will be maintained given the planned allocations to new curve gauges for ibAsset + USDC pairs?