Shell Tokenomics

Hey everyone! I hope all of you are doing well, pretty sure you are (thank you Elon).

What pushed me to create this post is seeing Kenny suggesting to start a new topic regarding retroactive rewards. In my case I have a hard time thinking about rewards without a broader context for the token itself.

Are there already materials or established ideas around $SHELL’s tokenomics? If not it would be useful to me to have a holistic view of the token first

2 Likes

Just adding this:

I think this was last blog post to highlight reward distribution in detail

2 Likes

Thank you very much! Good starting point

Setting aside the question of liquidity mining for now (as it is very much in the design stage, as the core protocol ebbs and flows), we can at least shed some light on our philosophy for the ultimate use case of $SEA and convey some of its future character. That too is much in the early days, but there are some principles we know we will abide by nonetheless.

The first, and most important, is that the token should align incentives across many stakeholders. We must attract a broad ecosystem of cooperation. There will be the core protocol devs, liquidity providers, other protocols, builders, and possibly mass market adoption. Part of the intention of this very topic and forum is to build these lines of communication between us. To us this is a fertile ground where our vision will come to fruition.

A second principle for $SEA is that in order for it to claim value from the protocol, then it must provide value to the protocol. We do not want to construct a system where the token is essentially a means of the right pocket taking from the left. If the token is to reap rewards, it must first offset that cost. This would probably come in absorbing risk for the protocol or enhancing profits. Two brief ideas are:

  1. Employing $SEA to subsidize insurance on deposits into Shell. LPs could stake their $SEA to back the network against a broken peg.

  2. Employing $SEA in parameterizing Shell pools, which will be a nuanced art in the future.

4 Likes

Your vision is amazing. You’ll get your token design right without a doubt.

Using $SEA as a protocol buffer like Aave’s safety module sounds awesome. Thanks for your response, it’s much clearer now. Please let us know what should we brainstorm about to help you guys, I think you’re already on point regarding $SEA

I agree doing something similar to the Aave safety module could work.

For anyone not familiar with it:

https://docs.aave.com/aavenomics/safety-module

2 Likes

Is there a $SHELL and a $SEA or am I confusing one as two.

Also, It’s not possible to know the tokenomics yet, and I get it and agree. Maybe there is already a rough guidelines of what is coming, like say will it be 50/50 rewards? will the LP be rewarded proportionately to their liquidity? you know those kind of high level stuff.

Also @kenny thank you for getting my liquidity into the pool, I will be providing more in the coming weeks.

Shells (SHL) is the LP token you get when depositing on the exchange and $SEA is the governance token. I didn’t understand it either when creating this post! Sorry for that

1 Like

Ok so we are getting free $SEA, hurray! :wink:

1 Like