💸Incentives & Emissions

Incentives & Emissions

Solunea encourages lockers to lock a larger portion of their SLNA tokens, resulting in increased voting power, collection of bribes, and swap fees from highly productive gauges. The greater the amount of locked SLNA tokens, the more fees they gather. Liquidity providers are also incentivized through emissions rewards. As the productivity of swap fees for a gauge increases, it attracts more veSLNA votes. Directing SLNA incentives towards a gauge leads to greater rewards for liquidity providers.

Improved ve(3,3) Emissions

While there is no maximum cap for the SLNA supply, emissions follow a system of decaying inflation, which gradually reduces the minting of SLNA tokens. The percentage of SLNA supply locked in veSLNA dictates the emissions rate, with higher locked percentages resulting in fewer minted tokens. This mechanism ultimately leads to a lower total future supply.

Weekly Emissions

The weekly emissions rely on the veSLNA to total SLNA circulating supply ratio:

baseWeeklyEmission * ciculatingSupply()/SLNA.totalSupply()​

As more SLNA tokens are locked by users, the rewards distributed to Liquidity Providers decrease, leading to a faster deceleration of emissions and a smaller future total supply. The baseWeeklyEmission experiences a 3% decay per week.

Emission System and Attractive Incentives

The emission system is crafted to make holding SLNA tokens smoother. Approximately 30% of the SLNA supply is distributed to veSLNA (subject to change due to lock ratio). The ve(3,3) emissions structure is influenced by the percentage of locked tokens, and a higher distribution of SLNA to veSLNA offers more appealing incentives for users to lock veSLNA. If the locked SLNA supply is limited, the expected APR for locking SLNA will be higher.