Nalis governance vote: Transaction tax? Emission? What?
Before we vote on the emission and transaction tax of Nalis, let’s do some basic yieldfarm 101.
So what exactly is the emission?
To be able to give rewards to investors that stake on a platform, tokens will need to get minted. This means tokens get created on the blockchain to use as a reward to users of the farms and pools. The rewards are reflected in the APR (Annual Percentage Rate).
The number of blocks per day varies on different blockchains.
What is the blocktime?
Block time is the length of time it takes to create a new block in a cryptocurrency blockchain. A block is verified by miners, who compete against each other to verify the transactions and solve the hash, which creates another block.
For example, on BSC about 28800 blocks are created daily.
On Polygon the number of created blocks / day is about 42000.
Currently every block, 6 Nalis gets created on both the BSC and Polygon blockchain.
This means a total of (about):
172800 Nalis gets created on BSC chain daily.
252000 Nalis gets created on the Polygon chain daily.
10% of these tokens go to the dev wallet to be used for team expenses, marketing and is used for new bushes. 90% goes to the farm and pool rewards.
What would a higher or lower emission mean?
To find a balance between supply and demand, an emission needs to be high enough to make it attractive to stake in a farm or pool, but not too high and cause a higher inflation because the market gets flooded with new tokens.
When staking in a farm or pool, the rewards will get shared among all providers in that farm or pool.
So more users, means a lower APR when the token price stays the same, since everybody will get an equal share. If the token price goes up, so will the APR because there is more value in the tokens that get minted every block, so there is a bigger reward to share among the users. The same goes for a price that goes down, so will the APR.
Lowering the block emission of Nalis would mean less tokens get created thus less rewards.
If the emission gets lowered 50%, so will the APR. At the same time this will mean that less tokens will be released on the market, lowering the inflation.
Currently Nalis has a transaction tax of 2%, meaning 2% of the Nalis used in every transaction will get burned (destroyed forever). This 2% tax was introduced as a way to counter inflation by burning tokens and incentivize holding the tokens instead of selling.
There are multiple other ways to burn tokens, for example by usage of deposit and/or withdrawal fees.
A 2% tax on all transactions might scare away (new) investors because they will lose 2% on every transaction, so in case of staking they’ll burn 2% at buying, 2% at staking and 2% at unstaking the tokens.
Removing the tax might make Nalis more accessible, but it could cause more inflation if it isn’t countered in other ways, one of these ways is lowering the block emission.
We are launching a governance vote from 2pm UTC on the 12th of January till the 15th january 2pm UTC on Snapshot.org for Lyptus holders to vote on the future of Nalis.
Voting on snapshot.org is 100% free, no gasfees required.
If you have your Lyptus in your wallet, a pool or a farm, you don’t have to do anything and can vote directly on snapshot.org, as soon as the poll is online we will share the address.
If you’ve staked your Lyptus tokens in the bush, you will need to unstake them before the 12th of January 1pm UTC in order to vote.
To make sure you won’t have an extra 2% deposit fee, the deposit fee of the Lyptus bush will be set to 0% for 72 hours so you can restake without extra deposit fees.
Based on the outcome of the voting polls the Koala Defi team write a proposal for the future tokenomics of Nalis.