Introducing PPO: The prePO Token
Learn about the tokenomics design of PPO - prePO’s governance and utility token.
After many, many iterations and in-depth industry-wide research, we’ve come up with what we believe is the ultimate tokenomics design.
Our tokenomics design incentivizes high quality, active participation and long-term alignment.
In this article, we’ll highlight the key functionalities of PPO - prePO’s governance and utility token.
You can earn PPO tokens by being an active user and adding value to the prePO protocol.
As a trader, you earn PPO through:
- Trading fee reimbursements
- Ranking highly in leaderboard contests
- Performing well for your copy traders
- Participating in each market’s comment section
- Staking PPO for future distributions
You can also earn PPO through ‘governance mining’, where you receive retroactive rewards for participating in governance and contributing to the prePO DAO in whatever way you can!
By staking PPO, you receive PPO Power (a non-transferable ERC-20 token).
You can multiply your PPO Power by staking for longer (time multiplier), unlocking achievements (achievements multiplier), or consuming power boosts (boosts multiplier).
The more PPO Power you possess, the greater your influence within governance, and the greater your share of future PPO reward distributions.
Importantly, only those who remain active, either through governance or on the platform, will receive staking rewards. If you become inactive for an extended period of time, your rewards will be paused and redistributed to other stakers instead.
Since high multipliers will accrue to active long-term stakers, PPO - and thus the future of the protocol - will ultimately end up in the hands of long-term believers (known as ‘pregens’) rather than short-term speculators.
Stakers will receive a share of all protocol fees, including any fees for trading, deposits, withdrawals, or early unstaking. These fees are first used to buy-back PPO, and then automatically compounded into each staked PPO position.
Stakers will also receive a share of all PPO spending.
On top of the above, stakers will receive bonus PPO emissions from the treasury, depending upon what percentage of total PPO is staked. If a low percentage of PPO holders are staking, then bonus emissions will be high; if a high percentage are staking, then bonus emissions will be low. This mechanism further incentivizes everyone to stake, thus creating a long-term aligned community.
Staked PPO as Collateral
As a staker, you can use your staked PPO as collateral for taking out loans, unlocking further capital efficiency for your PPO.
The prePO treasury will act as the lender, providing assets (such as USDC, ETH, or even PPO) for borrowing. If a loan isn’t paid back in time, the staked PPO will be claimed by the treasury and redistributed to stakers as an additional staking reward!
PPO can also be used for exclusive PPO-denominated purchases.
You can spend your PPO on power boosts to multiply your PPO Power, consumables for gated community access, cosmetic items for your prePO profile and virtual avatar, physical merch, gamification event items, and more!
Note: some items will only be available after you unlock a certain set of achievements.
The spent PPO is then redistributed amongst PPO stakers, thus boosting your staking APY!
Bond for PPO
prePO will utilize a custom bonding mechanism, where you can sell assets (such as ETH or USDC) to the prePO DAO Treasury in exchange for staked PPO tokens at a discounted price (driven by supply and demand).
Assets accumulated by the treasury will then be used for dynamically redirecting liquidity between prePO markets.
Allocations across each market will be continuously voted upon by PPO stakers, who are strongly incentivized to maximize protocol revenue.
Treasury assets will also be used to bootstrap liquidity for the PPO token, such that the majority of PPO token liquidity is owned by the protocol.
With protocol-owned liquidity, PPO trading fees will provide a constant source of revenue for the protocol, which can then be used to buy-back PPO and distribute amongst PPO stakers.
This revenue will be amplified through the adoption of advanced LP strategies, enabled by Uniswap V3.
Vote with PPO
Since prePO is a decentralized protocol, PPO stakers will be responsible for governance.
As a PPO staker, you can use your PPO Power to submit and vote on proposals, including for new markets, market resolution, fee adjustments, liquidity redirection, representative council members, and how treasury funds should be used. You will also have the ability to delegate your voting power to someone else.
And that’s a wrap for today’s post!
In future updates, we’ll reveal more details about the governance system, token distribution, and token launch.
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