In February we posted RGP-9: Ribbonomics  in which we detailed plans for Ribbon’s tokenomics, including plans for RBN liquidity mining rewards to vault depositors. We set out to distribute 250K RBN per week over the course of 6 months, after which point we would revisit the emission schedule. It has been 6 months since the first emissions and we suggest to make the following amendment:
- Keep 250K RBN inflation per week for the next three months
- Redirect a % of RBN inflation towards Ribbon Lend  pools
The current liquidity mining program initially set out to attract more TVL to Ribbon Finance vaults. While it effectively achieved that goal initially, the RBN LM program is no longer attracting new capital / depositors at the same rate. The main beneficiaries are the same group of depositors. This is partially part of a broader trend of a shift of attention and capital away from crypto in the past couple of months - many bluechip protocols are experiencing a similar trend.
The RBN incentives will be of better use in bootstrapping new products, including Ribbon Lend pools. We suggest to maintain 250K RBN inflation per week between the Ribbon vaults and lend pools but dynamically rebalance the allocation between the two to maintain a 5% RBN APR on Ribbon Lend (in addition to the supply APR). As Ribbon Lend TVL gradually grows, more of the 250K RBN inflation will be directed towards Ribbon Lend to maintain the same APR across all market maker pools.
Here is a chart of allocations between Ribbon Vault and Ribbon Lend based on Ribbon Lend TVL.
As you can see, once Ribbon Lend TVL surpasses ~$60M it will receive 100% of the weekly RBN inflation. Any further increase in TVL would require an increase in inflation per week to maintain the 5% RBN APR.
After three months or when Ribbon Lend TVL exceeds ~$60M (whichever comes earlier), we will create a new governance proposal and reassess the RBN inflation per week and the allocation between Ribbon vaults and lend pools. At this point, Ribbon Lend will have almost doubled our TVL.
We recognize that this approach has ramifications on the ve system and specifically veRBN holders. If this were implemented veRBN holders will have voting power on increasingly less RBN rewards. After three months, veRBN holders will be able to vote on Ribbon Lend pools exactly the way they do for Ribbon Vaults to maintain the same voting power (250K RBN per week).
This proposal is a simple and temperate approach towards gradually tapering rewards for current Ribbon vault depositors whilst gradually ramping up rewards to attract lenders for Ribbon Lend.
This is achieved without increasing the original 250K RBN emissions per week and only extends the emissions by three months, which dilutes the circulating supply by just 0.97% (4.34524 wk/mo * 3 months * 250K RBN/wk) / 335,415,329 RBN circulating.
This proposal will be posted on the forum for 1 week prior to voting. Voting will then be open on Snapshot for 5 days. This vote will be a single choice vote. You may vote on the proposal by selecting “Yes, let’s do it” or “No, this is not the way”.