We are thrilled to announce our new tokenomics which is set to revolutionize the GOVI economy and the way our platform rewards its users. Our team has been working tirelessly to create a system that incentivizes traders, liquidity providers, and GOVI stakers while lowering GOVI emissions and striving to make GOVI a scarce token. We are proud to introduce the new tokenomics model that will be instrumental in achieving these goals.
The features include rewarding traders and LPs with escrowed GOVI (esGOVI), hedging points to protect LPs during black-swan events, and real yield in USDC for GOVI stakers.
The new model, similar to GMX, combines an escrowed model to fully reduce GOVI token emissions, thereby increasing the scarcity of the token. The model also seeks to incentivize GOVI stakers, CVI traders, and Theta vault LPs.
The model will be developed in three stages:
Stage 1 — esGOVI — Reduce GOVI rewards to zero and switch to an escrowed reward model. This will be a high priority for the team and will enable users to stake esGOVI and compound their reward, or vest it to GOVI on the staking page. A vesting model similar to GMX will be used to vest new GOVI tokens over time.
Stage 2 — LPs and trader incentives — part of the esGOVI rewards will be distributed to the Theta Vault LPs and traders on top of their APR and returns in USDC. The model is currently being developed, and we are aiming for 20% emissions to traders and 20% emissions.
Stage 3 — Protocol owned liquidity which hedges LPs from black swan events and incentivizes longer-term theta vault depositors — This Stage will include a mechanism for hedging LPs from the event of a major black swan. The mechanism will be connected to the returns earned by the protocol owned liquidity over time.
Finally, our goal is to link the actual yield to the success and growth of the protocol. To achieve this, we will distribute emissions to stakers (60%), LPs (20%), and traders (20%). Once we meet the criteria of 2 out of 4 of the following milestones, we will begin replacing rewards of esGOVI with stablecoins such as USDC as real yield:
- Median 30-day Theta Vault TVL > $10 million
- Median 30-day volume > $0.5 million
- 3% / 4% / 6% / 8% yearly fees/staked GOVI (The community will vote)
- 60 days after the launch of the leveraged CVI token ($UCVI) + Hedging vault integration is launched and is actively protecting the vault
Essentially, 15% of the fees collected will be allocated towards Growth and Development, while the remaining 85% will be distributed as a real yield reward. Distribution of the fees will commence once we achieve two of the aforementioned milestones.
For example, after reaching a TVL of $10 Million in the Theta vault, as well as 8% fees/staked GOVI, 85% of the fees generated will be used to fund this return, with the remainder coming from esGOVI returns. Once we hit the yearly maximum esGOVI reward, no more esGOVI will be distributed, and only real yield will be rewarded.
Until we reach the threshold, fees generated by the protocol will be used for access growth, in addition to the APY that LPs receive from fees and esGOVI rewards for traders and stakers.
We will create a CVIP to determine the threshold.
The CVI is about to undergo a revolutionary transformation that will completely change the way we reward our users. Our team has been working around the clock to create a brand new tokenomics system that will provide real yield incentives to traders, Theta Vault participants, and Govi Stakers, while simultaneously reducing GOVI emissions and ensuring the token remains scarce.
We are super excited about the possibilities that this new tokenomics model will bring to our platform, and we can’t wait to see the positive impact they will have on both our community and economy.
For all of our updates and to join the conversation, be sure to check out CVI channels:
v3 Litepaper: https://cvi.finance/files/CVI.v3.Litepaper.pdf
Telegram (group): https://t.me/cviofficial
Telegram (channel): https://t.me/cvichannel