Background
The Cryptex Finance ecosystem has evolved significantly since its inception, with initiatives focused on liquidity, development, community engagement, and governance. Analysis has revealed a need for rebalancing the incentive structures, especially concerning the rewards for Single-Sided Staking (SSS). This proposal seeks to address the current imbalance by suggesting an increase in SSS rewards, aiming to promote loyalty and enhance participation in governance. Now is a particularly good time to extend the SSS program as the DAO is already planning to add more incentives to TCAP, making it an opportune moment to further support long-term CTX holders.
Current CTX Emissions Since Inception of the Protocol
Here’s a summary of the current CTX emissions:
- Operating Expenditures: 1,258,375 CTX
- Liquidity Pools: 1,766,000 CTX
- Single-Sided Staking (SSS) + Retroactive Airdrops: 319,205 CTX
Analysis
The proposal aims to reward loyalty and long-term holding while enhancing governance participation through staking and delegation. The current allocation for SSS has been significantly lower than for operating expenditures and liquidity pools, suggesting a need for adjustment. This increase is fair as it provides a proportional adjustment that recognizes the contributions of SSS participants in a manner that balances the risk-reward ratio across different ecosystem roles. It aligns with community expectations for a more equitable reward distribution, encouraging participation without risking economic stability, and is an incremental step towards a balanced incentive structure.
Proposed Allocation
Given the analysis, an increase in the SSS allocation for the year 2025 that doubles the current annual distribution is proposed. This would mean allocating 101,240 CTX for the year 2025, distributed quarterly at 25,310 CTX per quarter. This adjustment would bring the total allocation for SSS to 420,445 CTX at the end of the year.
Rationale
Doubling the rewards for SSS was proposed to address the historical underrepresentation of long-term holders in reward distribution, promote loyalty, and enhance governance participation. This increase is fair as it provides a proportional adjustment that recognizes the contributions of SSS participants in a manner that balances the risk-reward ratio across different ecosystem roles. It aligns with community expectations for a more equitable reward distribution, encouraging participation without risking economic stability, and is an incremental step towards a balanced incentive structure.
Conclusion
Based on the analysis, a proposal is made to allocate 101,240 CTX to the Single-Sided Staking program for the year 2025, distributed quarterly at 25,310 CTX per quarter. This adjustment would bring the total allocation for SSS to 420,445 CTX at the end of the year, moving closer to a balanced incentive structure that values the role of long-term holders in governance and community loyalty.
This proposal requires community approval through voting. Feedback is invaluable in ensuring continued development in a manner that is fair and beneficial for all stakeholders involved in the Cryptex Finance ecosystem.