Passed: Proposals Call to Reduce Canto Security Emissions and LM Incentives
0x4CeD
January 11th, 2023

With Canto’s fifth month of liquidity mining incentives ending soon, early contributors propose to the DAO a reduction in network emissions to improve the program’s sustainability and align Canto stakeholders.

Across two proposals, contributors call to reduce security emissions by exactly 20% and reduce liquidity mining incentives by approximately 26% across the board:

  • The proposal to reduce security emissions is to be submitted to the DAO at ~11AM Eastern Time on Thursday, January 12th.

  • The proposal to reduce liquidity mining incentives is to be submitted to the DAO approximately one week later, at ~11AM Eastern Time on Thursday, January 19th.

Information about the new parameters and the rationale for their updated values is provided below.

Analysis

After achieving deep liquidity in the Canto DEX and Canto Lending Market, contributors are looking to optimize the long-term sustainability of Canto’s incentives program by tapering security and liquidity mining incentives.

With the adjusted values, contributors hope to maintain as much liquidity as possible within Canto’s Free Public Infrastructure, while taking a meaningful step towards reducing Canto’s inflation.

Network Inflation

Network security emissions will be reduced by 20% compared to the previous period, with an inflation rate of 8 CANTO per block, minting ~3.5m new CANTO tokens in the upcoming 30-day period.

Currently ~53% of the circulating CANTO supply is staked for network security. The proposed emissions adjustment is designed to ensure the staked supply ratio stays within a target range of 40-50% while still decreasing $CANTO’s inflation rate.

Liquidity Mining Program

Liquidity mining parameters will face a reduction across the board compared to the previous period, with liquidity mining incentives dropping to a total of 53.4 CANTO per block, minting ~23.4m new CANTO tokens to LP token holders in the upcoming 30-day period.

Overall, this represents a ~26% reduction in liquidity mining rewards. Additionally, the allocation of liquidity mining rewards amongst DEX and lending market pools will be adjusted:

  • CANTO/NOTE: 25.6 CANTO per block (-20%)

  • ETH/CANTO: 11.2 CANTO per block (-30%)

  • ATOM/CANTO: 11.2 CANTO per block (-30%)

  • NOTE/USDC: 2.4 CANTO per block (-40%)

  • NOTE/USDT: 2.4 CANTO per block (-40%)

  • cUSDC: 0.3 CANTO per block (unchanged)

  • cUSDT: 0.3 CANTO per block (unchanged)

The programs will begin immediately when their respective proposals are executed on-chain.

About Canto

Canto is a Layer 1 blockchain built to deliver on the promise of DeFi – that through a post-traditional financial movement, new systems will be made accessible, transparent, decentralized, and free. Created by a loosely organized collective of chain-native builders, Canto is a new commons powered by Free Public Infrastructure.

Subscribe to Canto Public
Receive new entries directly to your inbox.
Collectors
View
#1
#2
#3
View collectors
This entry has been permanently stored on-chain and signed by its creator.
Author Address
0x4CeD9817cAD89…cB6f3c6aEBd4228
Content Digest
qcGOjzN5pGr0bIQ…0YsJjlZWjrp69zE