Abstract:
To address inflationary pressures and ensure long-term sustainability, SundaeSwap aims to reduce daily token emissions. While yield farming was crucial for attracting liquidity during the bear market, excessive emissions have led to token dilution, reduced value, and constant selling pressure, harming both holders and potential investors. By cutting emissions, SundaeSwap seeks to stabilize token value, decrease inflationary effects, and attract long-term investors, particularly institutional players. This shift from aggressive growth to sustainable value creation will reduce market volatility, foster a stable price floor, and encourage deeper engagement from users. Ultimately, reducing emissions will create scarcity, enhance token value, and position SundaeSwap for long-term success, benefiting investors and strengthening the broader ecosystem.
Background:
While yield farming was a necessary tool to attract users and liquidity during the bear market, the current daily emissions have become inflationary. With too many tokens being distributed, the rewards are diluted, which reduces the perceived value of Sundae (SUNDAE). As more tokens enter circulation, the constant selling pressure from yield farmers results in price depreciation, which harms both current holders and potential investors.
By cutting back on daily emissions, we can reduce inflationary pressures on the token. This helps create a more attractive environment for long-term holders, investors, and stakeholders who are looking for price stability. Price stability is a key driver in attracting institutional investors and larger capital inflows.
To create a more stable, sustainable ecosystem, it is essential to reduce the emission rate of new tokens. This proposal outlines potential emission reduction scenarios (90%, 75%, 50%, and 25%) and the anticipated benefits:
- Strong Price Stabilization: A drastic reduction in token supply will create a significant scarcity effect, leading to potential price appreciation.
- Decreased Inflationary Pressure: By significantly reducing inflation, the protocol will retain the value of existing tokens and attract long-term investors.
- Shift to Value-Driven Participation: With fewer tokens available, rewards become more meaningful, encouraging high-quality, engaged participation.
- Long-Term Investor Confidence: Institutional investors and larger capital inflows are more likely to invest in a token with a limited, controlled supply.
- Potential Risks: Risk of liquidity drop or user attrition if rewards become too low to incentivize participation.
Decision:
I propose the following vote for the DAO:
Vote YES, and decrease daily yield farming emission rates by 90%
Vote YES, and decrease daily yield farming emission rates by 75%
Vote YES, and decrease daily yield farming emission rates by 50%
Vote YES, and decrease daily yield farming emission rates by 25%
Vote No, and maintain current yield emission rates
Are you interested in voting in an on-chain governance to this effect?
- Interested