PAL 2.0: The Vote Flywheel

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Post Date March 06, 2024


Discussions regarding an update to PAL's tokenomics have been underway for approximately a year. As Paladin's flagship product, Quest successfully achieved Product-Market Fit (PMF) last year, prompting the team to prioritize delivering an enhanced version of the product. This led to the development and launch of Quest v2. With Quest v2 now fully operational, our team has redirected its focus towards enhancing synergies between the PAL token and its flagship product. By seamlessly integrating Quest with our tokenomics strategy, we are confident in our capacity to establish ourselves as market leaders in voting incentives, thus significantly amplifying interest in the PAL token. This is PAL 2.0, the vote flywheel.

We have successfully completed the Vote Flywheel code contest with Hats Finance. This unique competition saw x senior researchers engaging in a thorough examination to identify potential bugs within the contracts. We, once again, want to thank all the participants for their time. Now the real fun can start.

Our new tokenomics design will enable hPAL holders to control the allocation of PAL emissions as well as DAO revenue denominated in ETH to different Quests, boosting the yield available for Quest voters without increasing the costs for Quest creators. In short, Quest will become the most affordable place to deploy incentives and the most lucrative for voters.

What you should expect

Up to 5x on your apr!

Up to 5x on your apr!

Details on the system 

The Vote Flywheel initiative is designed to address three key objectives:

  • Increase demand for the PAL token;
  • Encourage users to commit to holding PAL tokens over the long term;
  • Avoid the immediate selling of newly issued PAL tokens.

To achieve these goals, the system allows holders of hPAL to have a say in how new PAL emissions are distributed across different areas of the project. One of these areas is the Vote Flywheel itself, which aims to enhance the APR available for Quest voters without any additional costs (no need to incentivize more) for the Quest creators.

With the introduction of this latest update, Quest creators are encouraged to buy and lock PAL tokens into hPAL. This strategy enables them to acquire a larger portion of the boost power from the Vote Flywheel, the system designed to distribute rewards. As a result, the demand for PAL tokens is expected to rise, reducing the number available in the market, which in turn could lead to an increase in their value. Armed with enhanced rewards capabilities, Quest creators can now offer greater incentives to those who participate in voting on Quests, leading to higher APRs for voters. This attractive APR is likely to draw more participants to the Paladin platform, ultimately benefiting Quest creators with increased rewards from the DEX emissions for the liquidity pools they support, thanks to the heightened voting activity on their incentives. 

In summary, voters enjoy improved APRs, while Quest creators gain more from the DEX's rewards with fewer incentives required.


What is the emission budget for the revamp of tokenomics?

The emission budget for the Tokenomics 2.0 will be 7,800,000 PAL over 3 years which corresponds to a 50,000 PAL weekly emission. It represents 15.6% of the total supply.

What is the max boost? 

The max boost you can get thanks to the new design will be 5x. 

What is the vesting for the Vote Flywheel rewards ?

The vesting for the Vote Flywheel rewards will be 28 days only applied on the PAL rewards. It will be a linear vesting over the period but if the user decides to exit early he would still get his revenue sharing share but only the unvested PAL on the day he decides to claim. The rest of the PAL rewards will be slashed.

What will be the default revenue sharing asset?

wETH will be the default revenue sharing asset as it is the best asset regarding immutability, risk and usefulness. Rewards in wETH will be the start of Paladin real yield as revenue sharing.

Last words

You can find all the conversations related to the tokenomics 2.0 in the following posts from Paladin’s Forum : 

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