Musings on $PLS V2.
14 Aug 2023, 12:27
Musings on $PLS V2
Tokenomics have yet to be perfected, but everyone is sleeping on the fact that $PLS V2 has set the bar for governance aggregators.
The new system rewards takes notes from $CVX and $GMX but rewards long term holders better than any other model to date.
Read on 👇
/dLuxGMI/status/1691064061809561600/photo/1 /dLuxGMI/status/1691064061809561600/media_tags
The tokenomic upgrade was released a month ago now and couldn’t have gone any smoother.
The new model is effectively a marriage of @ConvexFinance and @GMX_IO tokenomics that is most beneficial to long term players. Plutus is the first governance aggregator to utilize multiplier points (MPs) which creates intriguing implications.
While early buyers of Convex were rewarded with great PA, yields from locking $CVX were the same across the board whether you locked Day 1 or just yesterday. This is where MPs come in to bridge the gap.
The change that $PLS V2 sets for governance aggregators is the use of MPs that allows long term holders to accrue more power the longer they’re locked into the system. Early $PLS lockers were significantly rewarded with 300% MPs during the promotional locking period after release.
The new V2 tokenomics are not just a marriage of past models, but the team has effectively created a tokenomic structure akin to a sustainable $OHM fork.
The primary difference is that $OHM and its forks generated actual emissions (at ridiculous APYs) every 8 hours via rebases. Plutus now operates in a similar manner but these ‘emissions’ are sustainable and aren't liquid in that MPs.
For the sake of the argument, MPs can be perceived as similar to rebases since they help you retain your share of the pie as long as you're locked into the system. The difference is that MPs aren't liquid the way that rebases were so mercenary capital is less of an issue.
It won't be long until we see some insane $bPLS stacks as a result of MPs, some users are already approaching 100K MPs. As mentioned before, this isn’t a sustainability concern since multiplier points are contained emissions and will be burnt if a user decided to unstake. MPs will inevitably be golden handcuffs.
There are 3 ways to get ahead:
1⃣ Add to your $PLS stack via locking or $esPLS.
2⃣ Compound $esPLS rewards at a faster rate which increases MPs earned.
3⃣ Wait for others to leave the system.
This system is brilliant because unlike GMX, multiplier points aren't tied to a defined monetary bonus. Instead, Plutus MPs are a component in the system without a price that keeps you locked into the system if you believe in the abilities of the team and their direction. This model is a test case and it will be fascinating to see how it plays out.
TLDR: Plutus created a sustainable $OHM fork where early and loyal holders are rewarded best like any good Ponzi does.
P.S. Bribes and $ARB emissions are coming…