New Seigniorage Payout Rewards

In an effort to align the protocol with incentives evenly spread across the board, many big SHARE holders have agreed that the best course of action proceeding forward is to merge the USD-ETH pool rewards into the USD-USDC pool. The inspiration for this is to provide users a pool with the least amount of volatility possible. For reference, DSD only has a USDC pool and are very successful with it. We will round this LP pool up and give it 30% of total seigniorage rewards. This pool is the most important pool in the protocol, and this needs to be reflected in it’s payout. By giving such high rewards to this LP, more people will be incentivized to buy USD above peg and provide liquidity. Liquidity breeds liquidity, and the deeper the pool, the less volatile USD price will be after each positive rebase.

Next, we have decided to reduce xBOND payout to 40%. We believe this is very fair and still makes xbond extremely attractive for users to bond at 1:1 during negative rebase. During positive rebase, investors will now have to make a decision on whether or not to bond into xbond or compound into the USD-USDC LP. The ever changing APY will most likely continue favoring xbond as the most profitable rewards pool - even at 40%

SHARE holders - rejoice! We have decided to double rewards and give 20% for holding SHARE. We believe this is a fair number and allows SHARE holders to more aggressively increase their footprint in the protocol by taking their rebase rewards and compound them into either the LP or into xBOND.

Finally, that leaves 10% seigniorage rewards to ETH-SHARE lp. Although it seems small initially, the competition in the SHARE-ETH LP will be much less than just holding SHARE. This means there is a strong chance the APY will be greater for providing liquidity than just holding SHARE. At 10%, (plus farming rewards - both rewards will be merged into one pool soon), there is still plenty of incentives for people to provide liquidity.

An overview of the above breakdown can be seen here:

xBOND - 40%
SHARE - 20%
USDC-USD - 30%


I love it, it’s so beautiful - I want kids from this proposal. :heart:


This is the way!!! Also remove ETH/USD for SHARE pool and replace with USDC/USD so we can merge those after and get SHARE and rebase rewards derp.

Everything looks good here.

I would suggest that SHARE and SHARE-ETH LP percentages are flipped:

SHARE Holders: 10%
SHARE-ETH LP stakers: 20%

The rationale being that providing liquidity constitutes higher risk than just holding SHARE and that this risk should also be reflected in the rewards. This also incentivises greater depth in overall SHARE liquidity and a greater market for SHARE.

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Thanks for putting this proposal together, Shill - I like and support this proposal, but also agree with Shirkatsu’s comments here regarding the LP rewards.

Perhaps a compromise in the middle would be 15% to SHARE holders and 15% to SHARE-ETH LP

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I like it. I reckon we hold off on this change until the APY UI changes are updated by Robert. 2 reasons:

  1. I believe the LP rewards are already crazy good. Nobody knows though! We need these yields properly reflected in the dashboard.

  2. When people see the rewards it will click. After when we up the rewards, it will visibly click even more on the dashboard.

Cheers mate

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yes, create a proposal and let’s vote

I would suggest not to use USDC/USD pair . We should not connect with the other stablecoin, our value base is eth, the pair should be ETH/USD.

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I like the numbers and overall utility, but I agree with prophet that USDC adds a bit of counterparty risk, while also robbing Dollar Protocol of some kind of admittedly irrational independance from another centralized pegged asset…

Not quite in the “spirit” of defi, or the holy grail of algorithmically regulated decentralized stablecoin… Maybe its not time to worry about that right now, but imagine Centre or whomever gets the call from the Fed next month and says, “Sorry boys, youve just lost all liquidity.” ETH isnt perfect, but even the worse case scenario with them isnt as bad or likely

Full honesty though, maybe thats just being too picky or the benefits are totally worth it for the foreseeable future.

Otherwise looks good though, loving the refinements and DAO participation lately

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xBond is not working properly. It is way too difficult to cash out. You’re just stuck holding unless you get a very high USD price and a long expansion phase. Lessening their rewards only screws xbond holders over even more. This proposal should include a solution to the xbond liquidity problem.

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