TIP-94: Mint 3 months of staking rewards

Proposals
1

Vote Type

Token holder DAO via Governor Bravo

DAO-elected Sponsors

John Packel, Ashley (@MrsNuBooty)

Timeline

  • 3 days for comment / discussion on this proposal
  • 9 days for Governor Bravo vote (+ 4 days queue & timelock)

Key points

  • If passed by the DAO, this proposal would see the Threshold protocol mint 120 million Threshold work tokens (T) for future staking rewards
  • Only 3 months of rewards is proposed, rather than 1 year, because discussion is ongoing to potentially eliminate (or reduce) emissions (see TIP-92)
  • The sum distributed, and therefore withdrawable, will depend on the average staking rate between December 1, 2024 and February 28, 2025
  • Unless pre-empted by TIP-92 or other TIP, every stake with a functioning TACo & tBTC node will grow by 15% APY based on the Stable Yield Mechanism
  • For the reward split schedule (between the two applications), see Threshold Improvement Proposal (TIP)-32; info on the last rewards mint (Dec. 2023) is here

Details

For more details on the minting methodology and token distribution procedure, please see the 3 previous Threshold Improvement Proposals regarding minting of tokens for staker rewards: TIP-030, TIP-038 and TIP-053, as well as GP-032 moving token operations to Threshold Foundation (specifically its subsidiary).

Minting sum calculation:

  1. The DAO-approved Stable Yield Mechanism has a target stake growth of 15%.
  2. This minting event aims to cover staking rewards for the period of December 1, 2024 through February 28, 2025 in the event that there is no change to T inflation as proposed in TIP-92
  3. The liquid circulating supply is currently 11.035 billion T. There is 3.109+ billion T staked, which implies a current staking rate of ~28.2%. This means the sum of tokens required to universally increase all stakes by 15% for the 3-month period is: 15% * 0.25 * 11.035 billion * 28.2% = ~116.7 million T.
  4. Rounding up, this proposal therefore suggests that the Threshold DAO mint 120 million T tokens, which will be directly deposited into the Future Rewards contract.
  5. While the total T supply after the minting will be 11.155 billion T, any minted tokens will remain locked in the Future Rewards contract until they are needed for distribution of staking rewards.

These calculations are made with the assumption that the staking rate will remain roughly constant. If the staking rate decreases, any excess tokens will remain in the Future Rewards contract.

If tokenholders approve no change to the current emissions model, then we will need another mint proposal in approximately 3 months.

The initial supply of T was 10 billion, and after this minting (projected to last through February 2025) the total supply will be 11.155 billion T, which would be a total emission of 1.155 billion T – an average of 364.7M T per year.

3 Likes
2

Thank you for putting this together John, it makes sense to me.

In the scenario that TIP 92 passes and eliminates all inflation, what would you propose is done with the excess minted T?

3

Creating the T coin within this project appears to be a straightforward process. Can I trust this project?

4

A $T token mint requires approval from the T tokenholders, which is a fully onchain process. This proposal is in alignment with the DAO-ratified and widely known inflation model that Threshold operates under. You can read more about Threshold’s stable yield model in the link John shared above.

1 Like
5

Good point, thanks. My suggestion would be a) we award December in full per existing promise, b) I’d suggest sending balance to Gov Bravo for future needs, but rewards get minted to Future Rewards contract and IIRC it’s only possible to move them to Claimable; if that’s the case perhaps we mint 2/3 to a multisig like Treasury guild; c) if additional proposals pass soon that require mint, any balance could reduce what’s needed to mint for those.

Let’s discuss.

1 Like
6

Update: per GP-032 the Threshold Foundation BVI subsidiary multig manages the 2 proxy contracts Future Rewards (recipient of T token mints) and Claimable Rewards (topped up from Future Rewards with the monthly amounts earned, so stakers can claim). So if it turns out that not all the T minted is required for rewards distribution, the multisig will be able to send the balance back to Governor Bravo.

1 Like
7

This is queued to Governor Bravo. Voting will start Sunday, Dec. 22 at 9:18am ET.