Fresh from the Foundry!
After extensive discussions with $EGLD stakeholders and the MvX Community, the first three sections have been refined to integrate feedback and align growth, incentives, and sustainability.
Below is a summary of key updates and their rationale. 👇
1) Emissions Model
Emissions will now begin at a maximum-theoretic 8.757% during the Supernova Genesis year and decay toward 5%, then 2–5%, depending on measured growth.
This evolves the original flat tail inflation model with an adaptive structure tied to on-chain performance.
Growth will be evaluated through clear KPIs: staking ratio, fee burns (as a proxy for protocol revenue), and DeFi metrics such as TVL and volume.
Because the newly introduced “Accelerator” funds are KPI-gated, the effective circulating impact at launch is approximately 4.38% until those triggers are met.
This ensures inflation is productive, not idle and tied to measurable network expansion.
2) Emission Distribution
The new model simplifies and balances allocations:
✦ 50% Staking (network security)
✦ 50% Accelerator Fund, split into:
• 20% Growth Dividend for users (DAO-governed)
• 20% Ecosystem Growth for builders (DAO-governed)
• 10% Protocol Sustainability
Accelerator emissions governed by DAOs unlock only when the respective KPIs are achieved. Unused portions remain locked, reducing excess issuance and ensuring capital only flows toward proven growth.
An annual on-chain KPI report and governance vote will allow adjustments to these shares over time.
3) Fees and Value Accrual
The base fee structure has been redesigned to reward builders early, then increase the burn share progressively:
Year 1: 90% to builders / 10% burned
Each following year: a 5% shift from builders to burn
After 8 years: the model stabilizes at 50/50
For non-contract transactions, 100% of the base fee will be burned.
A priority fee is introduced, paid entirely to the block-producing validator (“leader”). Shard splits will factor in the ratio of priority to base fees, aligning shard expansion with real demand.
To prevent revenue misallocation, the VM now attributes fees by actual gasUsed per contract, ensuring wrappers cannot divert earnings from underlying builders.
4) Protocol Revenue Reinvestment
All protocol revenues will be programmatically used to buy EGLD on the open market, stake it, and convert it to liquid staked tokens (LSDs) for efficient yield participation.
This process is entirely rule-based and executed by smart contracts, not discretionary decisions — turning the protocol treasury into a self-reinforcing engine of liquidity, security, and reflexive demand.
Changes compared to Initial Draft
• Emissions are now adaptive, not static — they expand and contract with growth.
• Builder incentives remain strong at launch, but gradually shift toward higher structural burns.
• KPI-gated unlocks prevent idle issuance and link emissions to real ecosystem output.
• Validator economics are improved through a fair, competitive priority-fee model.
• Programmatic buybacks and fee burns create a direct, transparent connection between network activity and EGLD demand.
Addendum
Clarification: Anti-Manipulation Economics
Economic modeling shows that at full Supernova capacity, any attempt to spam blocks to harvest priority fees is financially self-defeating:
filling one shard’s blocks for a day would cost ~864 EGLD, with ~86.4 EGLD burned in the process — while only the rotating leader earns the priority rewards.
This ensures incentives remain aligned, efficient, and tamper-resistant.
The Agora post has already been updated to reflect the changes:
To compare versions, you can click the ✏️ item and see all the changes.
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