fMoney Tokenomics Analysis and Update
May 2nd, 2024

After close to a month post lender launch where the team has been closely monitoring it’s impact on our current tokenomic’s performance, we’ve identified some points to improve that will help with the current negative toll on both price and liquidity while increasing sustainability and protocol longevity.

  • Currently there’s no incentives or options for a long term investment in fMoney, which by default promotes value extraction or short term investments.

  • Lender emissions are either too high or need some kind of vest / penalty that benefits the overall flywheel. Possibly both.

  • While all revenue from fMoney is currently directed towards stakers, it becomes harder for the protocol itself to have a role maintaining and increasing liquidity, performing larger buybacks, seeding liquidity in other platforms in the future.

  • We have no treasury besides locked equalizer POL, which will return to multisig but it’s role remains the same, to provide rewards for stakers.Dependency on bribes must be reduced over time and passive income for the protocol created.Enabling the protocol to self vote & clawback fBux to re-award it to holders or if more profitable, vote for another gauge and convert it’s rewards to more $fBUX.

  • Bribing is a great system when ROI is positive, however there’s also negative and barely positive ROI weeks where sell pressure from voters getting it all in one go nulls any benefit from the steaming rewards received, which aren’t guaranteed to be converted back into more liquidity once handed over to stakers, it’s at their discretion.

To tackle these pain points, fMoney will move towards the following tokenomics / flywheel.

Locked Stake

A version of our staker with locked mechanics will be deployed to provide a long term investment option, which is heavily incentivised and rewarded for participation.Locked Stake depositors will be refered to “Lockers” non lock stakers will be refered to as “Stakers” in the rest of the article.

Lockers ensure long term liquidity for the protocol and become the de facto “shareholders” of the protocol, having the highest stake in it’s success by participation, receiving the most rewards and governance powers.

The perks for locking are as follows:

  • Beets rewards are shared by Lockers and Stakers based on their individual tvl within the Beethoven pool as both ultimately deposit in it.

  • Receive 70% of bribe related rewards such as equal or direct fBux if ROI is negative.

  • Receive Protocol Fees in the form of Staked LP receipt

  • EarlyUnlock Penalty distributed as Locked LP receipt to Lockers

  • Partner drops will be distro’d in the Locker.

  • Lockers get to vote on 30% of lender emissions. Further in the future when dex price based markets are available we’ll be able to add Bribes for eco token markets, further boosting the flywheel for lockers.

  • Governance is exclusive to lockers, once deployed, they will have influence in any new future changes to the protocol through governance proposals.

  • Currently locking options are between 1 to 6 months.

  • As fMoney is slated to migrate to Sonic, the contract will have a function users can call to dissolve their lock under the following conditions: Contract was paused & sonicMigration bool turned on by multisig. As such, depositors don’t need to worry about having to wait out a lock when we migrate to Sonic.

Direct % of rewards, protocol fees and penalties for fMoney treasury

As mentioned at the start of the article, the lack of a treasury makes it difficult for the protocol to have an active hand in increasing liquidity, performing larger buybacks, seeding liquidity or having passive income to further increase holder ROI, among other moves in the interest of the protocol. A treasry multisig was be created to act as treasury and keep funds separate from dev multisig.

  • Moving forward between 15% of weekly equal rewards will be locked into a veNFT on multisig.

  • 15% of weekly protocol fees will be kept as Staked POL.

  • 5% of earlyUnlock or earlyVestUnlock kept as Locked POL.

SubProposal: Catch and Release system with a % of protocol fees.

Instead of keeping the % of protocol fees do a catch and release.Essentially that % would buyback fBux and send to unitroller (holds lender emissions). It’s effectively a burn that lasts as long as emissions are meant to end, so at least 3 years. As no further fBUX can be minted, this acts as way to increase emissions longevity. This option will become more attractive as emissions schedule progresses and the protocol has gathered some POL

Emissions & Bribes:

  • Our emission schedule is being re-worked. Months 2–5 are currently boosted. In the current landscape it doesn’t make sense to increase them. As such those boosts will be normalized towards the average of non boost months and the extra will further extend emissions past the initial 3 years. Meaning, without further changes, emissions will start decreasing from month 2.Emissions schedule on docs will be updated to reflect these changes.Later on if the landscape would allow or need those boosts, it would be put through governance vote.

  • Our borrows will have a higher incentive than previously.

  • A further allocation of 2M fBUX will also be added to Unitroller (and 2M for bribes), contributing to further emission longevity and sustainability.

  • An OTC desk will be available moving forward. Our monthly fBux bribe allocation will be available for OTC to investors starting from $5k worth, and never over each month’s bribe alloc. The OTCer would receive fBUX vested for 1M through LlamaPay.This would help combat sell pressure from bribes as voters receive all the emissions in one go and mostly sell it off. This way we’d be able to provide wftm as bribes while having a part of the month’s alloc distributed over a month to people with an interest in holding fBux and participating in the ecosystem.

Lender:

Our rewarding will undergo an overhaul to help against buy pressure while at the same time incentivising staking and locking.

A % of fBux reward claims will be sent to a vesting contract with a 3 month vest for each depositor. If no further interaction, those rewards will be available to claim at the end of the vest with no penalties.

If a depositor would like to halve the time to be able to claim those rewards, there’s an option in the RewardVester contract to fully or partially earlyUnvest fBux, pair it with USDC and vestLock for 1.5 months on our LockBox contract. 20% Usdc for the pair will have to be provided by the depositor.Here the vestedLock position will earn from our usual 200-300% APR, further increasing depositor ROI and earning voting rights towards 30% of lender emissions, as well as all other perks mentioned previously in the article.

The final step if a depositor then wants to exit into a liquid reward option is the earlyVestUnlock.For 40% on the amount, full or partial position can be withdrawn and fMoney With Attitude BPT (BeethovenX LP) received by depositor, finally exising the system completely.

This % is awarded to remaining Lockers and vestLockers as Locked LP receipt with 5% kept for fMoney Locked POL.%s are the same for earlyUnlock, which is the user created lock, varying from 1–6 months.

The rewards always belong to the lender user while incentivising Lock and Stake use, with an an earlyClaim flow first strengthening liquidity and awarding continuous lockers.

We believe these changes will significantly improve our flywheel and attract a wider range of investors into the fMoney ecosystem

Collateral Factors, ReserveFactors

To incentivise volatile borrowing or cross asset supply/borrow, Collateral Factors for WFTM, lzWETH & lzBTC have been increased to 80%. sFTMx increased to 70%. Stable collateral factors will remain the same.To mitigate farming sell pressure, our Reserve Factor has been set to 20% as baseline for all markets, homogenising previously different %s per market. This will allow for larger protocol fee buybacks -> ROI for lockers.The monthly emissions alloc will also be tweaked slightly to further incentivise borrowing.

Stargate, lzUSDC

Currently borrow emissions have been halted and borrows disabled.Depositors have almost completely vacated lzUSDC supply and transfered it to axlUSDC and USDC.e markets.Shortly we will be removing the remainder of lzUSDC supply emissions, which have been slashed as depositors left the market to keep it inline with other stable markets. The tvl has dropped to 30k and this market will be disabled. By first pausing mints, then removing the emissions.Until further changes or new market additions, these emissions will remain unassigned.

Beethoven 80/20 Pool

As a consequence of Stargate’s proposal to remove support for lzUSDC, a migration of our Beethoven pool to an fBux/USDC.e pair is becoming increasingly likely.Beethoven team has given as an outline on how to best migrate in order to make it seamless as far as timing with bribes/stake top up.For now stakers don’t need to take action as everything would be set up for the new pool & staking contracts beforehand. When an announcement would be made stakers simply withdraw, redo LP on new pair and deposit in the new staker.ETA for this change is near the next Beethoven Voting round. We will announce with more detail as the date draws closer.

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