PIP-17: Tokenomics 2.0 - Boosting system

TL-DR: Decide on a boosting multiplier that will balance incentivizers’ subsidies and aligned voters rewards.


With PIP-14 passing, Mithras Labs has started developing the Vote Flywheel with the hope of pushing out this major update before the end of the year.

Before the deployment of these new tokenomics, we still need to iron-out four important parameters and processes that will define its success:


The boosting ratio will determine how much default emissions go to non-aligned stakeholders and how much aligned stakeholders can earn. This system was generally pioneered by Curve with veBoost and also serves as an anti-whale system preventing whales from monopolizing emissions. This system seems mostly misunderstood by a large number of users, which is why most projects adapting it to their tokenomics default to a 2.5x boost, like Curve did.

There is precedent for larger boosts like on Bunni, who experimented with a 10x boost before lowering it to 5x. Their parameters had to be lowered because the base emissions were too low to attract significant TVL. With Quest, such a problem is kind of moot since Quest creators already offer base rewards and our system does not impact this part of the reward structure.

There could be an argument for an even higher boost, and we remain open to it, but we believe, especially at launch, the vote flywheel should be as accessible as possible to everyone. With a 5x boost, base users would get ~20% of rewards streaming to them if they participate in Boosted Quests, amounting to ~10,000 PAL if our recommendation passes.


  • 3 months of development

Next steps:

  • Let governance decide on the actual system implementation (Vote Flywheel and LOOT);
  • Second proposal on the total budget of the program, which is likely to be the largest DAO spending ever;
  • Third proposal for LOOT to decide where the real-yield will come from (Warlord fees to begin with, most likely) as well as the parameters of our custom boost system;
  • Finally, we will need to introduce a Quest whitelisting framework.

Voting options:
For / Against / Abstain

  • For
  • Against
  • Abstain
0 voters
1 Like

Gm, thanks this detailed proposal & for splitting posts for different topics !

Tbh I don’t have a strong opinion on which boost should be picked, and this can easily be updated later on so it’s not a big topic.

Once thing I agree is that most ppl don’t fully understand this, and veBoost also creates bad UX for lockers (which is also why projects like Convex/Aura worked, so the potential effect of adding a boost might be a layer built on top and reaching an important amount of PAL locked)

It’s interesting to note that their first reduction attempt was from 10x to 2,5x, but as it didnt reach the quorum, they resubmitted a proposal with 5x.

True, but then since weekly emission value is quite low rn, a boost is mostly adding complexity imo, but agree it’s also a safety to avoid distirbuting to unaligned users.

(Ps: this post is missing a poll ^^)

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Given the relative lack of users in the Paladin ecosystem, I would tend to favour a lower boost multiplier, initially, with some form of a scheduled ramp up as more tokens are emitted. I am not any expert on maths, but for example we could say that the boost starts at 2x, and increases 0.5x every 10% of total PAL tokens emitted.

This design would initially be more favourable to un-aligned users, which would allow for a wider re-distribution of project tokens and potentially create a more diverse stakeholder cohort, but gradually turn towards higher returns for hPAL lockers, thereby incentivising more locking activity over time, without unduly the issue of favoring the current small group of PAL whales (tbh, I believe they will be over-represented in the initial wave of farming anyway)

I would guess that this is due to a lack of governance visibility within the project, rather than a lack of support for the change, but I am not as vigilant in their process.

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What you call bad UX is what I call friction: you have to work / align to get the full benefits of the tokenomics. Giving yield for very little or no friction is a major factor of selling pressure, which is one of the fears you have insisted on with this tokenomics model.

That’s an interesting idea. My worry with such system is that emissions largely hinder buying pressure. Something that has become very obvious is that our project currently lack buying pressure, is showing an efficient flywheel should puhs people to buy their way in.

But you’re right, in a sense, the question is: do we want to open these 50,000 PAL / week to everyone or do we want to reward exponentially older lockers? The lower the boost rate, the lower the incentive to lock

At least the older lockers will get to be the ones who choose the answer to this question, as they will be the ones voting it in.

Personally, I don’t see how this project reaches a new level, focusing on the few current users.

To give a bit more context to the relevance of the 5x boosting metric:

  • There are currently ~1000 users to Quest, a number which is expected to grow severalfold as we add new protocols over the coming months.
  • In comparison there are only ~50 hPAL lockers participating in Quests (on 127 total lockers). This means that most users are not stakeholders.

Our goal should be to not only have these 1000 users as lockers, but also target the other ~20k vetoken voters.

By chosing a 2x boost, the risk of locking would be much higher than its incentive. With a 5x boost, all these voters will see they can grow their rewards A LOT by locking. It is estimated that it will close to double rewards for early adopters at launch

Proposal published on snapshot.

Quorum PIP-17: 885 158 votes


Thanks for this proposal I support an initial 5% boost rate at launch. This will send a strong signal about the advantage of locking and being a power user.

There is an extra mile to do for users and projects to understand how the boost system works but Paladin is targeting DeFi powerusers at first so this seems manageable. Eager to see if a layer on top will appear at some point in time !