RFP (Idea) - 34: Establishing a Dynamic Emission Schedule for dLP Lockers

Radiant Foundation Proposals (RFPs)
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RFP-34: Establishing a Dynamic Emission Schedule for dLP Lockers

Abstract

RFP-34 proposes a strategic extension to RFP-33 by introducing a dynamic emission schedule for dLP lockers, enhancing the incentivization mechanism for RDNT distribution.

This proposal is designed to strengthen the outcomes of the increased token supply approved in RFP-33 by encouraging long-term participation and stability within the Radiant ecosystem. Focused on incentivizing dLP lockers who sustain their positions, this schedule allocates emissions over a two-year period with increased benefits accruing in the latter half.

Motivation

Building on the foundation laid by RFP-33, which sought to enhance Radiant’s emissions runway and increase utilization rates, RFP-34 is crafted to further leverage these efforts by prioritizing the contributions of those who have committed to locking their dLP within the Radiant protocol.

RFP-33 earmarked 125,000,000 RDNT for the purpose of streaming additional rewards to eligible dLPs over a two-year period. RFP-34 introduces a back-weighted emission schedule designed to reward long-term commitment among these eligible dLP lockers, thereby ensuring sustained engagement and enhanced liquidity. This phased approach to distributing rewards aligns with the gradual dilution expected from the supply adjustment terms as laid out in RFP-33, ensuring that the incentives remain effective and stabilize token value as the supply increases. By doing so, RFP-34 aims to bolster the community’s investment in the protocol’s success, aligning the community with Radiant’s strategic goals.

Key Terms

  • qLP (Quantum dLP): Dynamic Liquidity Provider (dLP) tokens that have been locked prior to the initial snapshot of the two-year incentives program. qLP represent a user’s proportional share of the two-year allocation. These tokens are identical in value, benefits and function to standard dLP tokens on-chain, but are logged and tracked separately within the Radiant protocol to facilitate the allocation of additional incentive rewards.

  • Initial snapshot: A designated on-chain record taken three months (90d) after the ratification of RFP-34. This snapshot captures and locks the quantity of dLP tokens held by each user, determining their eligibility and proportional share as qLP for the two-year incentives program.

Specifications

  1. Incentivization Structure: RDNT allocated to dLP lockers will be distributed over a two-year term, with a back-weighted emission schedule continuously increasing as it progresses over the term duration. This structure increases the relative reward for lockers who remain committed throughout the term. The schedule is designed as follows:

    Period Percentage of Total Emissions Total RDNT Emissions Monthly Distribution
    First 6 Months 10% 12,500,000 RDNT 2,083,333 RDNT
    Second 6 Months 15% 18,750,000 RDNT 3,125,000 RDNT
    Third 6 Months 25% 31,250,000 RDNT 5,208,333 RDNT
    Final 6 Months 50% 62,500,000 RDNT 10,416,667 RDNT

  2. dLP → qLP: Upon initiation of the snapshot, each dLP currently locked within Radiant will be considered as a qLP, regardless of its lock duration. A user’s qLP total represents their proportional share of the total RDNT allocation pool.

  3. Partial Forfeiture for Early Exit: If a locker decides to unlock any portion of their qLP during the term, they will forfeit that corresponding proportion of potential emissions. Their remaining qLP balance will continue to remain eligible for incentives as the term progresses. The later in the term the exit occurs, the lesser the penalty, with the most substantial forfeitures occurring within the first 12 months.
    By enabling “Auto relock” on the “Manage” page within the Radiant app users can ensure that their qLP positions remain uninterrupted, safeguarding their full eligibility throughout the term.

  4. No New Entries Post-Snapshot: Post the initial snapshot, no additional qLP can be created. This ensures that the benefit is reserved exclusively for those who are part of the ecosystem at the time of the snapshot. Future incentives will be structured differently to accommodate new community members.

  5. Reclamation of Forfeited RDNT: RDNT forfeited by early exits will be reclaimed by the DAO to support long-term protocol sustainability and future initiatives.

Example of Early Withdrawal Impact on Incentives

Consider a user, Alice, who has 100 dLP locked at the time of the opening snapshot. Those 100 dLP are now treated as 100 qLP. For these examples, let’s assume that her 100 qLP represent 1% of the total qLP pool:

Scenario (End-of-Month) Withdrawal Point RDNT Received at Point Remaining Eligibility Total RDNT by Term End
Month 6 - Full Withdrawal 100 qLP 125,000 RDNT 0 RDNT 125,000 RDNT
Month 6 - Partial Withdrawal 50 qLP 125,000 RDNT 562,500 RDNT 687,500 RDNT
Month 12 - Full Withdrawal 100 qLP 312,500 RDNT 0 RDNT 312,500 RDNT
Month 12 - Partial Withdrawal 50 qLP 312,500 RDNT 500,000 RDNT 812,500 RDNT
Month 18 - Full Withdrawal 100 qLP 593,750 RDNT 0 RDNT 593,750 RDNT
Month 18 - Partial Withdrawal 50 qLP 593,750 RDNT 312,500 RDNT 906,250 RDNT
No Withdrawal (Full Term) N/A 1,250,000 RDNT N/A 1,250,000 RDNT

RDNT Received at Point: The total RDNT received by Alice up to the point of withdrawal or check-in, calculated based on the back-weighted emission schedule at the specific timeframe.

Remaining Eligibility: For partial withdrawals, this column shows how much more RDNT Alice would continue to receive until the end of the term if she maintains the remaining qLP.

Steps to Implement

Initial Setup & Launch

  1. Conduct an on-chain snapshot of all dLP lockers three months (90d) from the proposal ratification date to determine initial eligibility and each qualified user’s proportional share of the incentives program. This will establish which dLP tokens are converted into qLP for the duration of the emission period.

  2. Begin the RDNT distribution following the back-weighted emission schedule immediately after the snapshot validation.

Frontend

  1. Update the Radiant app’s user interface to display each holder’s qLP balance distinctly from their standard dLP holdings.

  2. Implement a visualization of distribution progress and status, allowing users to see the amount of RDNT they have received and the expected future distributions based on the back-weighted schedule.

  3. Provide information on the timing of future distributions and emission schedule.

  4. Allow users to easily understand the implications of early exits or additional locks after the snapshot, emphasizing that new locks will not qualify as qLP.

Backend

  1. Implement a database schema to tag and track dLP tokens that qualify as qLP at the time of the snapshot. This involves marking eligible tokens in the database and ensuring they are distinguishable from regular dLP tokens.

  2. At the time of the snapshot, run a script that scans all dLP holdings. For each dLP token held by a user, if the token is locked, update the database to set is_qLP to true.

  3. Implement a monitoring system that continuously checks the state of qLP tokens. If a user unlocks some or all of their qLP tokens, the system should update the database to reflect these changes, recalculating the remaining RDNT entitlement based on the back-weighted schedule.

  4. Develop a dedicated module within the existing backend architecture that handles the logic for RDNT distribution from the DAO Reserve, along with an automated distribution stream.

Timeline

  • T-0 (Ratification Date): Official announcement of the emission schedule to the Radiant community. The snapshot for determining eligible dLP lockers is scheduled. Development of backend database schema and frontend UI/UX integration commences.

  • T+3 Months: The snapshot is taken, locking in the eligibility and the amount of RDNT each qLP will potentially receive. This marks the closure of new entries into the qLP category. From this point, the emission schedule begins.

  • Months 1-6: Initial phase of emissions with 10% of the total 125,000,000 RDNT distributed, providing monthly payouts.

  • Months 7-12: The second phase sees an increase, with 15% of the total RDNT distributed over these six months.

  • Months 13-18: Distribution increases significantly, with 25% of the RDNT allocated during this period.

  • Months 19-24: The final and most incentivized phase, with 50% of the RDNT distributed, rewarding those who remain locked.

  • End of Year 2 (T+27 Months): Completion of the RFP-34 emissions program. Evaluation of the program’s impact on liquidity and community engagement. Preparation of a final report on the outcomes and potential adjustments for future incentive structures.

Overall Impact

User Impact: By implementing a back-weighted emission schedule, this proposal strongly incentivizes long-term commitment and enhances user engagement with the Radiant ecosystem.

System Impact: Increases protocol stability and locked liquidity.

Cost

  • Development: The development efforts required for this proposal will be handled by our existing salaried development team, incurring no additional charges.

  • Operational Expenses: There are no new outlays for services or operational expenditures anticipated, ensuring the implementation is cost-efficient and leverages our current resource allocation effectively.

Voting

In Favor: Agree with establishing a dynamic emission schedule as described.

Against: Oppose the dynamic emission schedule proposal.

Abstain: Remain neutral, contributing to the quorum without endorsing or opposing the change.

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