Introducing the $THOR Incentive Pendulum & 5x Staking Boost 🔥
Olympus Pro bonds kickstart the new $THOR Incentive Pendulum and 5x boost to single-sided $THOR staking
THORChads have enjoyed some amazing yields for bootstrapping $THOR token liquidity on THORChain and Sushiswap.
We are now introducing our very own incentive pendulum to adjust incentive rewards to ensure THORSwap’s longevity and sustainability.
The Olympus Pro partnership is a major step for THORSwap’s long-term sustainability. With liquidity owned, guaranteed and stabilized by THORSwap, we can now adjust incentive rewards for better long-term alignment.
$THOR Incentive Pendulum Explained
$THOR pool is over-efficient
The $THOR pool on THORChain is currently the 2nd deepest pool on the THORChain network with $43M of liquidity. Currently sitting at the 7th most 24 hour volume of nearly $500k, which makes this pool over efficient!
Incentive Pendulum Adjustments
The following adjustments will be made to the THOR Incentive Pendulum:
- HUGE increase (Up to 5x!) in single-sided $THOR staking yields
- Users acquire discounted $THOR via Olympus Pro Bonds which helps THORSwap acquire liquidity
- Responsibly reduce THOR-RUNE LP/farming emissions to a more sustainable level
These changes will occur gradually, as LP block rewards will gradually reduce and single sided staking rewards gradually increase, all whilst OHM bonds are in full throttle!
5x boost to $THOR single-sided staking
We will be gradually increasing single-sided staking rewards by 5x! This is where the game theory comes in hence (🔱,🔱)!
Most circulating $THOR is locked in the staking contract already. The new vTHOR proposal (Staked THOR 2.0) will continue this trend.
Own liquidity in the THOR-RUNE pool
ETH.RUNE bonds on Olympus Pro allow THORSwap to start acquiring liquidity in the THOR-RUNE pool. After acquiring ETH.RUNE, we will then upgrade it to Native Rune (retiring ETH.RUNE) and deposit the Native RUNE into the THOR-RUNE pool. As pool deposits rebalance, this essentially purchases THOR with RUNE, thus creating a deflationary effect on $THOR.
Reducing LP/Farming emissions
Currently, the daily block rewards are 160,800 $THOR tokens which when added to the pool are rebalanced and auto-compounded directly. This daily inflation plus the auto-rebalancing creates sell pressure by essentially selling half the $THOR block rewards for $RUNE, a sub-optimal use of block rewards.
Gradually reducing farming emissions aligns with more efficient and sustainable yield. This reduces inflation from THOR emissions to farmers and can be easily achieved because:
1) THORChain already provides sustainable yields
2) Synths introduction will drastically increase volume which in turn boosts yield
3) Cashback for vTHOR stakers will kickstart the trading blackhole and thus increasing APYs
With a 5x boost to single-sided THOR staking, current LP’ers can asymmetrically withdraw THOR to enjoy the new rewards boost!
THOR and RUNE are positively correlated and coupled with sustainable yield makes it a flourishing pool! The more liquidity THORSwap owns then the more deflationary THOR becomes. Protocol owned liquidity (POL) means the protocol will be more stable, secure, and sustainable and helps bring more utility to THOR.
Btw, where do you think the rewards from protocol owned liquidity will accrue to?
hint: starts with “v,” ends with “THOR” 😉
Think of this as THORSwap’s own incentive pendulum, the balance between staking incentives and demand for Olympus bonds.
If bond demand is high on Olympus Pro, we will be incentivising that by increasing our monthly allocation to OHM and reducing LP emissions whilst keeping yields steady for THOR stakers.
If bonding has low demand, we increase single sided staking APY to encourage bonding, as users flood to acquire discounted $THOR to stake.
This incentive pendulum creates a game theory that is a win-win for everyone: discounted THOR in return for POL, high and sustainable yield for hodlers, and stabilized liquidity for traders.
Welcome to THORSwap Game Theory! Let us get bonding (🔱,🔱)
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