$MINomics Research Part 2: Introducing Dynamic Emissions Schedule

  • 1st month (16th March 2022 to 15th April): 1.2% total supply = 60 million MIN ≈2,000,000 emitted daily.
  • 2nd month (15th April 2022 to 15th May): 1.1% total supply = 55 million MIN ≈1,833,333 emitted daily
  • 3rd month (15th May 2022 to 14th June): 1% total supply = 50 million MIN ≈1,666,666 emitted daily.
  • 4th month (14th June 2022 to 14th July): 0.9% total supply = 45 million MIN ≈1,500,000 emitted daily.
  • 5th month (14th July 2022 to 13th August): 0.8% total supply = 40 million MIN ≈1,333,333 emitted daily.
Example of Linearly Declining Emissions Schedule. Starting at 16.3 million tokens emitted per month, it declines by 250K a month for 48 months for a total of 500 million tokens. The blue line shows the total Emissions over the life of the protocol. The orange line shows the Emissions per month.
  • Targeted: not only at increasing liquidity, but mainly at increasing LP fee generation. The target should also be not to “overspend” emissions in order to reach those goals and make them last as long as possible.
  • Adaptable: to different market scenarios and conditions.
This chart shows a comparison of the TVL/Emissions ratio of a DEX with a Static Emission Schedule vs. one with a Dynamic one. As you can see, in this case, the Dynamic Schedule lasts an additional 38 months longer.
  1. Market share of DEX TVL: monitoring and aiming to capture a % of total Cardano DEX TVL share.
  2. Market share of DEX Volume: monitoring and aiming to capture a % of total Cardano DEX Trading Volume share.
  3. Emissions/TVL: if TVL seems relatively static, it might be worth experimenting and lowering the amount of Emissions in order to have the length of the Emissions last longer. The aim should be to reduce the Emissions/TVL ratio without losing TVL market share.
  4. Emissions/Trading Volume: this metric is representative of the efficiency of the deployment of Emissions. For example, if TVL is increasing, but Trading Volume is not, one could argue Emissions should be reduced.
  5. Trading Volume per Circulating Coin (TVPCC): this metric would show the Trading Volume on the DEX per circulating $MIN.
  6. Profit per Circulating Coin (PPCC): this metric would be the Trading Volume minus the Emissions deployed divided by the circulating $MIN.
  7. Market scenarios: for example, perhaps a strong competitor DEX has stopped or drastically lowered their Emissions, it would be a good time to reduce Emissions to decrease the Emissions/TVL and Emissions/Trading Volume Ratios. If a new competitor DEX surfaces, or perhaps a new wave of Cardano DeFi users is onboarded, it might be a good time to increase Emissions.
  • Minswap Kitty Farmer and DeFi Gigabrain Marco elucidates Dynamic Emissions schedules and lays out a case study showing how they could be an improvement over Fixed Emissions Schedules here.
  • Ava Labs Head of DeFi Luigi DeMeo goes over basic tokenomics concepts and introduces the idea of why Dynamic Schedules make sense here.
  • Gauntlet elaborates on their approach towards optimizing Yield Farming Emissions for Sushiswap here.

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Minswap is the multi-pool decentralized exchange on the Cardano blockchain: https://minswap.org