πͺCORE Tokenomics V2
Last updated
Last updated
$CORE, and the staked derivative xCORE, are the native tokens of Core Markets which are key to the platform's adoption and community ownership. $CORE V2 dynamically adjusts token emissions based on revenue and employs a novel distribution/redemtion mechanism for traders and stakers. This balanced solution ensures our tokenomics remain adaptive to the evolving needs of the protocol and its participants, fostering a sustainable and stable economic environment for our users, stakeholders, and the Core Markets community.
Using the revenue gernated by Core Markets, we have implemented an automated buyback solution for CORE using an xCORE pool. This solution operates as follows:
Revenue Generation: Core Markets generates revenue from trading fees (subject to service fees from SYMMIO and IntentX).
Buyback Execution: This revenue is used to buy back CORE tokens from the open market.
Redistribution: The bought-back tokens are then redistributed to CORE stakers (xCORE holders).
When you stake CORE, you will receive a receipt token (xCORE) that acts as your claim to a portion of the CORE in the staking pool. With automated buybacks, the CORE:xCORE backing ratio will increase over time, meaning the longer you stake CORE (or hold xCORE), the more CORE you will receive upon exiting the pool.
This mechanism guarantees a continuously increasing and auto-compounding backing ratio for xCORE holders AND consistent upward price pressure on the CORE token with the protocol operating as a buyer of last resort. Furthermore, the 1% fee tier for CORE/USDB LP buybacks will enhance both the proportion and value of the LP over time, creating a mutually beneficial scenario for all stakeholders.
To discourage the practice of βfarm and dumpingβ, we have implemented two measures:
Emissions in xCORE: Staking and Trader emissions will be given in the form of xCORE.
Exit Penalty: A flat exit penalty of 2.5% when unstaking xCORE to CORE. Importantly, this exit penalty will be burned from the total supply.
This means that when farmers dump or stakers exit the xCORE pool, the total supply of CORE will decrease over time. While a flat rate of 2.5% may seem insignificant, we believe that over long time scales, this will act as a meaningful sink to offset emissions. Moreover, this rate is adjustable and may be tuned to meet the protocolβs needs.
Data from our initial Blast Gold distributions showed that the vast majority of participants fell into two distinct categories: traders or stakers. The proportion of users that did both was very small, which was not conducive to a sustainable ecosystem nor was what we intended with the original token design. To restore equilibrium and ensure the protocol provides value as intended, we have instituted a Staking and Volume Multiplier system.
This multiplier augments the value used to calculate daily trader emissions weight (xCORE, Blast Gold, and Blast Points):
1x: No xCORE held
2x: 25,000 xCORE held
3x: 50,000 xCORE held
For example, if a trader wants to capture the most volume-based xCORE emissions, it benefits them to already have an xCORE position. In a scenario where the daily notional volume is $100,000 and 50,000 xCORE are given away in emissions:
User A: $20,000 in notional volume and holds 50,000 xCORE (3x multiplier) = adjusted volume of $60,000.
User B: $30,000 in notional volume and holds 25,000 xCORE (2x multiplier) = adjusted volume of $60,000.
User C: $50,000 in notional volume and doesnβt hold xCORE(1x multiplier) = adjusted volume of $50,000.
Adjusted volume for the day is now $170,000. Proportions of daily volume are:
User A: ~35% = 17.5K xCORE
User B: ~35% = 17.5K xCORE
User C: ~30% = 15K xCORE
This example demonstrates how impactful multipliers can be. These multipliers are also used for Blast Gold and Points distribution moving forward.
*Note: as staking multipliers are in the form of xCORE, they will be harder to obtain over time as the CORE:xCORE ratio increases!
Inverse to traders getting staking multipliers on their volume-based emissions, stakers get volume multipliers for their staking-based emissions:
1x: <$5,000 in daily notional volume
2x: >$5,000 in daily notional volume
3x: >$10,000 in daily notional volume
This encourages stakers to trade if they want to maximize their daily xCORE earnings.
With $CORE V1 it became evident that static daily CORE emissions were being exploited. To prevent this value leakage, we adjusted our emissions to align with each epochβs revenue. For example, if Core Markets generates $1,000 in daily revenue in USDB, the equivalent value in CORE will be emitted for that epoch.
This adjustment achieves several objectives:
Mitigates Abnormal Selling Pressure: Even if 100% of emissions are sold, the sell pressure will be offset by the daily buyback for the xCORE pool. Additionally, the maximum sell pressure will be reduced by the 2.5% burn fee, making it 97.5% of the buyback not accounting for exchange fees and slippage.
Fairly Rewards Active Users: The protocol will reward the most active users. Those who both hold xCORE and trade will receive the most emissions.
Incentivizes Volume in a Non-Dilutive Manner: The new emission model encourages trading volume without diluting existing value.
Emissions are distributed as follows: 70% to traders (subject to the staking multiplier) and 30% to stakers (subject to the volume multiplier). We believe this split fairly rewards both roles and will significantly enhance rewards for genuine users who value the protocol.
Note: Emissions will continue until the allocated 42,500,000 tokens for T2E emissions are exhausted. The rewards system distributes xCORE on a daily basis, allowing traders and stakers to claim their earnings every day. To prevent rewards farming via wash trading, the USDC / USDT is excluded from receiving any rewards.
Indeed, Core is community-driven, with users having the ability to stake their $CORE for xCORE, whether earned or bought, to gain 'yield' in the form of the CORE:xCORE backing ratio. This yield is directly linked to Core's profit, of which 100% is distributed to xCORE holders via the automated buyback system. Furthermore, as Core evolves towards a decentralized autonomous organization (DAO), xCORE will serve as the primary mechanism for governance, enabling stakeholders to have a say in the platform's future direction and decisions.
Note: Note: Total revenue (fees) are subject to service fees from IntentX (15%) and SYMMIO (40%). Any present and future $BLAST incentives are not subject to fees and will be 100% distributed to CORE platform users.