LEVEL DAO Proposal: Regulating LVL Balance
Revenue-based LVL burning & Omni-chain reward mechanism
Burn baby, burn
The recent DAO proposal asks for approval on a mechanism to regulate the DAO’s LVL balance. Here is how the mechanism would work in practice.
- For every dollar of revenue the Level DAO collects, we will burn an equivalent dollar worth amount of LVL from the treasury.
- The burn will happen every Wednesday, using 7-day TWAP of LVL.
- At terminal emission, LGO’s intrinsic value should equal its surrender value.
As an example of the weekly burn in practice, Consider the following scenario:
On a particular week, the total protocol fees amount to $1M. The DAO recieves 30% of these fees, which is equal to $300K. As a result of this $300K inflow to the asset reserve of the DAO, $300K worth of LVL would be burned from the treasury reserve. This would lead to the burning of 60,000 LVL, (assuming the 7 day TWAP of LVL is $5).
Earn Level Real yield wherever you prefer
We will soon start implementing the omni-chain reward mechanism. First starting with Referral Rewards, then to LVL and LGO staking features.
- Referral program: Users can select their preferred chain where they want to receive their LVL rewards. Our keeper network will be responsible for keeping track of all referral reward points in all chains and settle the rewards in the chain that users prefer.
- Yield and DAO Staking: We will use an epoch-based reward system, where users can stake their LVL and LGO on their preferred chain for the duration of 1-week (one epoch) to accumulate the reward points. These reward points can be exchanged to the yield (LLP) or LGO once the epoch ends. All staked LVL and LGO will be automatically rolled over to the next epoch. Users can stake more or unstake during the epoch.
- Omni-chain LGO surrendering: Besides enabling users to stake LGO on any ecosystem to earn yield, users will also be able to redeem LGO against Treasury assets on their chain of preference.
Keep a look out on our Twitter and Discord for announcements surrounding the new implementations.
