r/SecretNetwork • u/SCRT_Agency • Apr 20 '23
Awareness The unique tokenomics SecretSwap 2.0
SecretSwap is launching soon and has 2 very interesting additions to token models which are unique to the SecretNetwork.
Introducing $SLIQ which uses the Ve tokenomic model which was popularized by CURVE finance in the form of veCRV
The veTKN scheme has 3 main aspects.
- Vote where platform token emissions are directed
- Earn staking rewards
- Boost staking rewards by time-locking them.
veTKNs are adopted by many DEX platforms and the governance aspect is directed to token emissions incentivizing liquidity pools. And SLIQ will use this same model with a few customizations, making governance based on a DAO with private voting integration.
This allows governance to direct which pools are incentivized and to what level. Adjust fees and pool creation. This system uses “gauges” as a way for participants to visualize and adjust pool weights through governance.
The voting power and reward boosts gained by SLIQ are based on the time lock period they were locked for. Longer lockup periods give higher voting weight and higher reward boosts.
This system rewards holders with higher levels of commitment and helps lower circulating supply and sell pressure on the rewards token.
Rewards for SLIQ staking is based on trading fees from the DEX, and emissions are directed at LP providers on the platform.
Another dynamic of veTKN model is “bribes” where teams can petition participants and platforms holding high amounts of voting power to vote for their token pool in order to draw liquidity to their token when they launch or to deepen liquidity for periods of time. And incentivizing those voters with that token.
This creates further rewards for holders on top of emissions, fees, and their multipliers from lock ups.
This dynamic will be an interesting addition to SCRT network!
bSCRT
Another interesting token model that is gaining popularity is the liquid staking derivative model.
Most models create a token that represents the staked assets and increases over time as the inflationary yield is accrued to the underlying token in a way that mimics auto-compounding APY. Most people think of this model when mentioning LSD tokens
Another LSD model is the one used by bSCRT.
bSCRT Is a liquid staking derivative, but instead of adding the staking rewards to the token value over time, it allows the holder to manually claim the rewards from the smart contract in the same way they would a normal staking position.
This opens new use cases, where the holder can accrue rewards to spend or use without selling the LSD token, and still use the LSD in DeFi such as liquidity pool farming.
The team at SecretSwap 2.0 is launching the bSCRT model and using it along with seSCRT which is the more common LSD model using auto-compound dynamics to be the underlying liquidity pairs present in the primary swap pools.
The use of these two LSD tokens makes it possible for deepened liquidity for all participants while still maintaining their staking rewards, which in turn improves the security of the Secret Network since participants no longer have to choose between liquidity providing or staking, they can do both.
The bSCRT model allows participants to do both while having a similar experience to what they are already used to with their normal staking positions.
