Opal is a project whose operation is based on the pooling and deployment of liquidity on a certain index of markets. The value proposition of the protocol is a set and forget, gas efficient, diversified and user friendly access to sophisticated farming opportunities.
To achieve this and sustain it as the protocol scales up to thousands users, Opal will activate its unique tokenomic structure centered around the $GEM token. Let's delve into the intricate details of its utilities and distribution.
From a user’s perspective, Opal tokenomic encourages alignment between governors and Omnipools Lps by creating interdependencies in the outcomes of their respective behaviors.
The $GEM token is designed to capture value from Omnipools farms and drive it among stakeholders to incentivize growth; while mitigating inflation thanks to a well thought compounding mechanism reducing $GEM float and securing ETH liquidity depth.
Seed raise funds will be used as initial liquidity for the Public Sale and cover audit costs before launch. Overall, community oriented emissions represents 74% of the total supply split in 5 categories:
Community: 10%
Designed to onboard newcomers and reward the most committed users or community members of Opal’s ecosystem, a detailed explanation and ETA for this incentive will be communicated soon enough in a dedicated article.
Liquidity mining: 16.2%
$GEM native emissions will be distributed among Omnipools according to the weights defined each round in governance through GEM Allocation Votes (GAVs); rewards will stream continuously along farming epochs similarly to underlying pools’ DEX emissions.
The $GEM liquidity mining program is scheduled to run over 8 years, the emission rate will reduce by 25% every anniversary of the token launch; 4.5% of the total supply (2.25M $GEM) will be distributed the first year.
The fixed part of the supply includes all emissions whose schedule is determined before launch using bonding curves; it accounts for 81% of the total $GEM supply.
Rebalancing rewards: 19%
In order to ensure the correct allocation of protocol controlled liquidity, and protect $GEM value by further aligning Opal's ecosystem participants, it is necessary to allow more flexibility in the distribution of $GEM rewards, thus 19% of the supply will be dedicated to dynamic emissions.
To incentivize regular deposits and withdrawals, $GEM emissions will be distributed to liquidity providers who deposit into Omnipools while the pools are imbalanced.
The $GEM received will be based on the amount deposited, and will follow a bonding curve encouraging time sensitive deposits. This boost in rewards will be distributed linearly over the next epoch. Removing liquidity from the pools will result in forfeiting the boosted yield.
The rebalancing module will also incentivize users to trigger the transfer of liquidity after each LAVs by providing $GEM rewards to offset the potential cost of routing liquidity between assets and strategies.
$GEM Boost : 18.8%
Introduced in the previous article, Opal governance participation will be aggressively incentivized during its early days, as a result 18.8% of the supply totaling 9,400,000 $GEM will be distributed to $vlGEM holders and Omnipools LPs within two years.
However the potential selling pressure resulting from such inflation rate requires to be offset and managed by a strategic distribution, fulfilling a set of criteria relative to users' commitment to the protocol.
First of all, because security measures against flashloans and exploit are hardly compatible with the use of $GEM price variable (including market cap and FDV), as part of the function ruling the emission rate, it is preferred to stick to a predefined bonding curve instead of a dynamic emission of $GEM boost rewards.
Hence, aiming to correlate $GEM emissions to its market value is technically inefficient, the focus should then be made in weighting users' commitment through their share of $vlGEM supply as well as of Omnipools TVL.
Each eligible users is attributed two weights variables :
From these variables, each user will be attributed a boost weight "k" calculated by :
Considering that all 9,400,000 $GEM will be minted linearly over 2 years, which corresponds to 180,769.231 $GEM per Epoch, each eligible user will receive the following amount of $GEM per epoch :
It is necessary to use a ratio derived from both initial weights to counter the opportunity for a user to game the system by holding a very low share of either $vlGEM or Omnipools TVL and farm disproportionate rewards, with a slight advantage given to vlGEM holders.
Public Sale: 10%
In order to bootstrap Opal’s community and resources, a public sale will be conducted through a yet to be disclosed mechanism. Raised funds will be split between four lines
50% to seed the initial liquidity of the GEM-ETH pool on Balancer,
25% deposited into Omnipools as protocol owned liquidity to increase revenue sharing,
10% dedicated to project’s growth (hiring, diversify treasury without dumping GEM, marketing expenses)
15% Used as pairing liquidity to support vlGEM supply bootstrap and prevent governance attack.
Fee Structure :
The revenue sharing mechanism of the protocol is performed through the cash flow utility of the $vlGEM token.
Opal takes a 9% fee on Omnipools farms, and 0.5% withdrawal fee on Omnipools LPs. Fees will be held in the original currency ; 50% will be locked to increase protocol owned governance power and 50% will be distributed to $vlGEM holders.
Stay tuned for the next article that will disclose the parameters of the $GEM token generation event, occurring through a multiple steps process including public sale.
Bullish
cannot wait for this