Proposal for Allocating DFX Fees to veDFX Users

DFX Proposals
1

Proposal for Allocating DFX Fees to veDFX Users

Summary

This proposal suggests allocating 25-50% of all DFX fees to veDFX users, with the aim of enhancing the benefits for current veDFX holders and incentivizing potential users to participate in the DFX ecosystem. This initiative is designed to reward long-term commitment and active governance participation, further aligning user interests with the growth and success of DFX Finance.

Motivation

The primary motivation for this proposal is to strengthen the veDFX system’s appeal and utility. By distributing a significant portion of DFX fees to veDFX holders, we acknowledge and reward their commitment and contribution to the DFX ecosystem. This strategy not only provides tangible benefits to current users but also serves as a compelling incentive for new users to lock in their DFX tokens for longer periods. Moreover, it aligns with the principles of decentralized governance, ensuring that those who are most invested in the platform’s success are duly rewarded.

Specifications

  1. Fee Allocation: Allocate 25-50% of all collected DFX fees to veDFX holders. The exact percentage can be decided through a community vote.

  2. Distribution Method: The distribution will be proportional to the amount of veDFX held and the duration of the lock-in period, favoring longer commitments.

  3. Implementation Timeline: Develop and deploy the necessary smart contract updates to enable this fee distribution within a specified timeframe post-approval.

  4. Monitoring and Adjustment: Establish a review mechanism to monitor the impact of this change on both the DFX ecosystem and veDFX holders, with the possibility of future adjustments based on empirical data and community feedback.

If Proposal Passes

Pros:

  • Increased attractiveness of veDFX as a long-term investment.

  • Enhanced stability in the DFX ecosystem due to incentivized long-term holding.

  • Strengthened decentralized governance as veDFX holders become more integral to the platform’s success.

Cons:

  • Reduced immediate liquidity as more users lock DFX for veDFX.

  • Potential complexities in implementing and managing the new fee distribution system.

  • Possible short-term fluctuations in DFX market dynamics as the ecosystem adjusts to the new incentives.

If Proposal Fails

Pros:

  • Stability in the current fee structure and distribution mechanisms.

  • Avoidance of potential technical and governance complexities associated with changing the fee distribution.

Cons:

  • Missed opportunity to further incentivize long-term holding and active governance participation.

  • Potential stagnation in the growth of the veDFX user base.

  • Risk of veDFX becoming less competitive compared to similar mechanisms in other DeFi platforms.

  • add 25% of fees to vedfx
  • add 50% of fees to vedfx
  • no I’m opposed to adding fees to vedfx
0 voters