Single Auto Vaults & Revised Tokenomics

This post was originally published on Autofarm

AUTO galore! The highly-anticipated single AUTO token vault is going live on Autofarm on the 19th of May at 8pm GMT+8. Users will be able to stake AUTO to earn more AUTO!

We are pleased to be introducing single token AUTO vaults alongside a revision of the current AUTO tokenomics — thoughtfully crafted to best benefit investors and capture token value whilst ensuring longevity and sustainability of the protocol.

Single AUTO Vault

Single token vaults on Autofarm continue to be a mainstay of the platform, attracting over $790M of liquidity due to its lucrative rewards, low fees and absence of impermanent loss.

AUTO single vaults will not only encompass Autofarm’s already established yield optimising strategies that compound staked AUTO automatically, but also maximise capital efficiency for AUTO token holders. Users with staked AUTO tokens will be able to play a governing role in deciding between the % allocated to burns and revenue sharing. The start of governance using AUTO tokens will pave the way for the formation of a Decentralised Autonomous Organisation (DAO) governance of the Autofarm ecosystem due for Q4 2021 as stated in our revised roadmap.

Revised Fee Structure

With the introduction of the AUTO single vault, all vaults on the Autofarm platform in Binance Smart Chain (BSC) will have an additional 1% in performance fee. In addition, with the recent spikes in BSC network congestion and higher gas prices, to continue the high frequency of auto-compounding in the vaults, controller fees which are used for gas will be increased from 0.2/0.3% to 0.4%.

In summary, BSC vault fees are as follows:

biswap
  • Base Controller Fee: 0.4% (increased by 0.1–0.2%)
  • Platform Fee (treasury): 0.5% (no change)
  • Vault Fee ($AUTO buyback & burn): 1.5%, 3.0% for non-$AUTO earning vaults (no change)
  • Vault Fee (Revenue shared with single AUTO vault): 1% (New)
  • Deposit Fee: <0.1% on initial capital (no change)
  • Withdrawal Fee: 0.0%

Total Fees: 3.4 + <0.1% on initial capital. Additional details on each of the fees are elaborated on here.

For starters, the newly introduced 1% vault fee will be collected and redistributed as AUTO tokens to those who stake in the single AUTO vault while the regular 1.5% AUTO buyback and burn would continue to deflate the total amount of AUTO tokens in circulation, increasing scarcity of AUTO tokens.

Staked AUTO tokens will have a 7-day lockup period and users will be able to vote during the last week of each month. The current maximum allocation to vault fees is a total of 2.5% of which stakers can vote the relative % to be allocated to AUTO buyback and burns, and revenue sharing.

Example:

June

Majority votes of 2% vault fees allocated for revenue sharing and 0.5% allocated for AUTO buyback and burns.

July

Majority votes of 1.5% vault fees allocated for revenue sharing and 1% allocated for AUTO buyback and burns.

Revised Tokenomics

Tokenomics are a vital component of any protocol. It acts as a signal to investors and potential investors about the strength of a project. As Autofarm continues to evolve and grow, there is a need to ensure our token architecture is sufficiently robust such that the protocol can be built around the AUTO token sustainably, while remaining beneficial to all stakeholders of the protocol. Autofarm’s revised tokenomics reflects our continued push towards going cross-chain and move towards protocol governance.

Alongside the launch of the single AUTO vault, AUTO rewards distributed to BSC vaults will be reduced to 70% and consequently, 30% of AUTO tokens emissions up till October when all AUTO emissions cease (~10,725 AUTO tokens), will be kept as reserves for protocol incentivisation for cross-chain vaults and other products in the Autofarm ecosystem such as AutoSwap, our leading DEX Aggregator. In the near future, single AUTO vault stakers will also get to vote on proposals on the allocation % of incentives given to specific chain networks and products.

Further details are as follows:

  • Revised tokenomics will come into effect on the 19th of May at 8pm GMT+8
  • The maximum total supply of AUTO remains capped at 80,000 with daily emissions fixed at 230.4 AUTO daily
  • (Original) BSC vault mining programme had a total of 202.5216 AUTO emitted daily (minus team allocations)
  • (New) BSC vault mining programme will be reduced to 141.76512 AUTO daily emissions (70% of total community AUTO allocation of emissions)
  • The remaining 60.75648 AUTO daily emissions (30%) will be reserved for future incentives of cross-chain vaults and other products in the Autofarm ecosystem

Conclusion

Both as a community and as a team, Autofarm has come a long way since we started in December 2020. Long-term vision and sustainability were always some of the few key factors determining the forward plans for Autofarm. We are glad to be able to meet the highly-requested single AUTO vault from the community and create greater utility for the native AUTO token. Additionally, we stand by our firm beliefs on token scarcity, not resorting to printing new tokens for cross-chain incentivisation but by carefully crafting a sustainable plan using the previous AUTO tokenomics to meet the cross-chain goals of the chain-agnostic Autofarm.

Once again, thank you to the Autofarm community for your continued support. We strive to keep BUIDLing innovative products under the Autofarm ecosystem.

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Single Auto Vaults & Revised Tokenomics was originally published in autofarm.network on Medium, where people are continuing the conversation by highlighting and responding to this story.

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