THALES tokenomics V2
Introduction
Since inception, the core of the Thales Protocol has been the Thales community, composed of THALES token holders. In Q4 2023, there was a community-led call-to-action in the form of an on-chain vote to determine the future of the THALES token. The result of this governance event was a firm consensus on the following proposals:
- Launch Protocol Rewards! Start distributing stablecoins accrued as trading activity fees directly to THALES stakers on a weekly basis as part of staking rewards claims.
- Ungate AMM LP contracts! Remove THALES staker requirement from all AMM Liquidity Providing contracts and allow anyone to provide stablecoin collateral for Thales Protocol products.
- Reduce THALES token emissions as base staking rewards from 105,000 THALES per week to 40,000 THALES per week and implement a fixed -0.5% weekly decrease of THALES token emissions towards stakers
- Unify and synchronize all Optimism, Arbitrum and Base staking contracts into a unified cross-chain pool using Chainlink CCIP!
Thales Protocol is proud to announce that all outlined Tokenomics V2 changes are successfully implemented and live in production from Wednesday, January 17th!
New Protocol Rewards
All trading products of Thales Protocol (ThalesAMM, SportsAMM, ParlayAMM, SpeedMarketsAMM) across Optimism, Arbitrum and Base have a fixed 2% fee on all trades. Additionally, AMM Liquidity Providers have a 20% performance fee on every positive round that additionally compliments the fee accrual. Before Tokenomics V2, mentioned fees were accruing into the SafeBox contracts. To date, the SafeBox contract had various purposes, from acting as an insurance fund in early stages of Thales Protocol to the more recent Buyback & Burn program. With the Thales Protocol and its products experiencing maturing growth, the Thales Governance Structure decided that its time to start sharing SafeBox designated funds directly to THALES staking contracts.
Starting from January 17th, weekly stablecoin accumulations of trading and LP performance fees will be directly distributed to THALES token stakers. All trading and LP contract instances across Optimism, Arbitrum and Base will have their fee accruals unified into a single crosschain rewards pool each week using Chainlink’s CCIP technology and equally distributed to all THALES stakers across all supported networks. Stakers will be able to claim their new Protocol Rewards together with their regular THALES staking rewards on a weekly basis. Stakers on Optimism will claim Protocol Rewards in sUSD, stakers on Arbitrum will claim in USDCe and stakers on Base will claim in USDbC. At the end of the week, unclaimed funds are transferred as inflows into the next week and distributed to all stakers as the rest of the accumulated stablecoins.
Opening the AMM Liquidity Pools
To date, only THALES stakers were able to provide liquidity in AMM collateral pools of Thales products. Liquidity providing has been gated to allow only the most aligned community members to gain exposure to the AMM performance while also putting a soft limitation on the amount of TVL until the architecture is solidified and matured.
With Thales tokenomics V2, the gating condition is removed and anyone is able to permissionlessly deposit stablecoin collateral into Thales AMM LP contracts and gain exposure to the performance of Thales products.
The goal of opening all AMM Liquidity Pools to the public is to allow the TVL of ThalesAMM, SportsAMM and ParlayAMM collateral pools to grow freely. An increase in TVL will allow Thales products to offer traders deeper liquidity with higher caps and lower Skew Impact slippage on trades, which additionally brings better UX, invites more trading volume and increases Protocol Rewards.
Reduction of THALES token emissions
The organic growth of Thales Protocol has reached a sustainable stage where the THALES token emissions can be dialed down as it’s no longer necessary to emit large amounts as a bootstrapping tool.
Thales Tokenomics V2 will entail the following reductions:
- Global THALES emissions towards stakers to reduce from 105,000 THALES per week to 40,000 THALES per week (-62% decrease in weekly emissions)
- Emissions towards THALES/WETH pair Liquidity Providers on Optimism to decrease from 20,000 THALES + 2,000 OP per week to 18,500 THALES + 1,000 OP per week.
The staking emissions are not only decreasing, but also becoming more efficient through the cross-chain synchronization of staking rewards, thanks to the integration of the Cross-Chain Interoperability Protocol (CCIP). There are no longer disbalanced rewards on different networks due to external factors which incentivized active stakers to often unstake and bridge to the network with a higher APY. The global rewards pool of 40,000 THALES becomes a singular cross-chain pool distributed to stakers pro rata and only as a function of the amount of THALES staked and Gamified Staking points, regardless of the choice of network.
Out of this global amount, 20,000 THALES are distributed weekly to all stakers as regular base rewards and 20,000 are distributed as Gamified Staking rewards based on the amount of weekly Gamified Staking points leaderboard.
Chain-agnostic THALES staking via Chainlink CCIP
To make a more fair and efficient staking system that drastically improves User Experience across all supported networks, Thales Protocol will leverage Chainlinks Cross-Chain Interoperability Protocol (CCIP) so THALES staking becomes completely chain-agnostic.
Using CCIP, regardless of which network you stake your THALES, you always get the same rewards per THALES staked as every staker on any network. This allows for an organic user acquisition for the Thales Protocol across Optimism, Arbitrum and Base where all stakers get an equal treatment. Not only are the THALES token rewards synchronized across networks, but the Protocol Rewards as well. Regardless of which network SafeBox fees accrue the most, you as a THALES staker on any supported network will get your fair share of stablecoin rewards as anyone else.
THALES staking continues with the regular snapshot based weekly reward claims, but from now on stakers claim Protocol Rewards in the form of stablecoins next to their regular THALES staking rewards. Protocol Reward claims will be denominated in whatever Thales Protocol uses as base collateral for the network where the claim is taking place:
- Stakers on Optimism will claim their Protocol Rewards in sUSD
- Stakers on Arbitrum will claim their Protocol Rewards in USDC.e
- Stakers on Base will claim their Protocol Rewards in USDbC
This new staking system officially starts with the regular weekly staking snapshot on Wednesday 17th of January.
More details around Thales <> Chainlink CCIP integration on official announcement and blog post that will go live on Thursday January 18th.
A bright future for the Thales Protocol
Tokenomics V2 initiative is solidifying the Thales Protocol as a pioneer in novel cross-chain tokenomics. With the organic growth picking up speed across all metrics and all supported networks, it is a perfect timing to put this forward looking architecture in place to accommodate and capture this growth equally for all Thales community members.
To further solidify the branding of Thales Protocol as a core AMM and Liquidity Layer infrastructure that powers the trading frontends, there will soon be a release of a brand new “thales.io” interface that focuses solely on THALES staking, Governance participation, AMM liquidity provision and integration across all networks and products.
About Thales Protocol
Thales is an Ethereum protocol that acts as the Automated Market Making and Liquidity layer for prediction markets. This building block is the foundation of novel on-chain derivatives, from a platform for AMM-based Digital Options to AMM-based Sports Markets, and much more.
Let’s stay connected
The best way to stay up-to-date with Thales latest developments, and also actively participate with ideas, suggestions, and feedback is to join Thales Discord.
Make sure to also follow Thales on Twitter.
