KuSwap v3 Migration Governance Proposal — Part 2: Tokenomics Changes

KuSwap
4 min readJun 10, 2023

Dear KuSwappers,

The successful passage of the KuSwap v3 Migration Governance Proposal Part 1 by KUSGOV marks a significant milestone for us. It sets the stage for the next phase, Part 2, where we will delve into the proposed tokenomics changes that are necessary to ensure that the DEX can operate under optimal conditions.

Summary

In line with the previous proposal, KuSwap is undergoing a transition from the Emissions Farming model to the RealYield Farming model. This new model brings forth exciting opportunities for veKUS Holders, as they will now have the opportunity to earn 100% of the fees generated from swaps. Additionally, there will be opportunities for stablecoin farming, subject to community decisions made through on-chain voting. This presents a lucrative income stream for veKUS holders who play a crucial role in determining the allocation of emissions and also receive incentives from liquidity providers, including projects that put their liquidity on KuSwap.

Stages

In order to ensure that everyone is well-informed and has sufficient time to ask questions and understand the proposal, we will be implementing a three-stage voting process.

1️⃣ Protocol Changes ✅ Passed
Stage 1 is all about protocol changes and additional features.

2️⃣ Tokenomics Changes (We are Here)
Stage 2 is all about changes in the supply, distribution, and emissions of the KUS token

3️⃣ Migration Plan
Stage 3 is all about the migraton strategy and how the migration will be executed.

Stage 2: Tokenomics Changes

A. Initial Supply Distribution

The initial supply of KUS tokens in KuSwap v3 will be set at 36,920,000. This allocation is designed to cover the following:

  1. Existing Holders (32,000,000 KUS or 86.67% of the initial supply)
    A. Migration of Existing KUS Holders
    B. Migration of Existing KUSGOV Holders
    C. Migration of KUS LP Pairs
  2. Team: (2,520,200 KUS or 6.83% of the initial supply)
  3. Holder Bonus Pool (369,200 KUS or 1% of the initial supply)
    KUS Holders who migrate early will receive more rewards than those who do it later. The process will be detailed in Part 3: Migration Strategy.
  4. Airdrop to KUSGOV Holders (738,400 KUS or 2% of the initial supply) Tokens will be airdropped to KUSGOV holders who lock into KUSGOV before the snapshot date. The details will be announced in Part 3: Migration Strategy.
  5. Airdrop to Early KUS LPs (553,800 KUS or 1.5% of the initial supply) Tokens allocated for Liquidity Providers. The details will be announced in Part 3: Migration Strategy.
  6. Airdrop to KUSFOX and KUSFOXES Holders (369,200 KUS or 1% of the initial supply)
  7. Airdrop to Migration Community Activities (369,200 KUS or 1% of the initial supply)

B. Emissions Allocation

In KuSwap v3, the emissions will be distributed as follows:

  • LP Rewards and Rebase (88%)
  • Team (9%)
  • Marketing: (3%)

C. Emissions Decay

Decay: To maintain a sustainable emission model, a decay of 3% will occur at the end of every epoch (week), gradually reducing the emission rate over time.

D. Maximum Supply and Minting Governance

The maximum supply of KUS tokens in KuSwap v3 is set at 47 million. However, veKUS holders will have the authority to decide whether to mint additional tokens for purposes of increasing emissions or expanding to other chains. Any minting beyond the 47 million supply will require a governance voting process and will be subject to a 72-hour timelock, ensuring transparency and community consensus in decision-making.

Discussion

June 10, 2023, to June 16, 2023

One (1) Week will be given to the community to discuss these matters in the KuSwap Telegram, Discord, and KUSGOV Forum.

Voting

The voting for this stage will be held on June 17, 2023 from 2 PM UTC up to June 18, 2023 1:59 PM UTC.

The voting proper, including other details such as voting type and quorum will be available on https://snapshot.org/#/kusgov.eth/

The proposed tokenomics changes in KuSwap v3 pave the way for a more sustainable and predictable ecosystem. By transitioning to a RealYield model, reducing emissions, and establishing clear allocation and distribution mechanisms, KuSwap aims to enhance user experience, incentivize participation, and foster the long-term growth of the platform.

KuSwap Finance

--

--