[For Discussion] Potential adjustment to ALPACA tokenomics to support upcoming (Perp, AF2.0) and future product launches

Also devs are getting more than %50 of lyf revenue
Btw we have 6.3M alpaca in warchest ready to use

I believe that option 1 or 4 are the best. Creating a new token does not seem to be a good idea.

Option 1 is the best in my opinion because is the one that will attract more capital and increase the token price while maintaining fund for future development.

I understand why people don’t like to increase the number of tokens, I also don’t like it but more investors mean more revenue and much more burning in the future. Besides I think the team has proposed it in a way the inflation is extremely controlated.


Don’t you worry about the problems option 1 can cause ? Which i explain in up

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The only CERTAINTY we have TODAY is that we DON’T KNOW if we are going to have ISSUES altogether or – should we have issues gaining traction – what’s the amount/extent of incentives people will need to decide provide liquidity on our platform vs competitors

In light of the above, I would consider:

  • Finish the build as soon as possible, minimizing distraction
  • Launch the new features, which should happen when we’re deflationary
  • Ensure the launch is supported with adequate marketing (using warchest)
  • Run like this for a month and observe what happens

if we struggle to get traction

  • Redirect current burn/liquidation/partial perf fees to incentivise

if we still struggle to get traction

  • Consider inflation/new token

In essence, I believe changing the fundamental principles and tokenomics of Alpaca should be the last resort AFTER we tried everything else

Final considerations:
! There’s a lot of evidence showing how solid protocols got themselves killed by playing with their own tokenomics.
! There’s a lot of evidence showing that protocols reduce emissions to become deflationary. We’re already in this position, why go backwards?


This time I agree with Gianni. And particularly with this wait-and-see approach.
The proposal doesn’t seem to take into account the biggest asset the platform has - its large user base. We need to incentivize through existing ALPACA reserves (Liquidation, Early Withdrawal, other fees revenue if needed). Do marketing, spread the Gospel ourselves and IF it doesn’t work, do optio s 1, 2 or 3. If option 4 actually works though, you will end up with one of the best tokens in the game, which I dare say aligns the interests of everyone.
If this is put as an AIP and voted shut again by some 9M xALPACA whale, I believe you will see the first mass exodus on this platform.
Option 4 without an AIP


We are using alpaca incentives for a +0.1% apr on lending and now we want a change in tokenomics or a new token? :joy:

I genuinely don’t understand, why can’t we use these incentives for perpetual liquidity? why when the emissions end we couldn’t use the buyback alpacas if necessary?

To the devs seeing this, please do not put this proposal to a vote, alpacas would be greatly affected

100% with you on this Gianni. New token or changing tokenomics should be our last resort. I personally found Alpaca finance at the beginning of this year, and what made me fall in love with this token was it’s tokenomics. Ever since Alpaca has been my only investment, every spare cash i find i invest in buying more alpaca. I agree with an option of redirecting burn/liquidation, etc fees to incentivize the new products is a better approach.

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What do you mean “this time” …lol

Sometimes I silently disagree with you on Discord :smile:

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I’m strongly in favour of #4

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Of course - 4. For two years you have been saying that the token has a deflationary model. We believed you. And we hold the token in a bear market. And now you propose to increase the token emission or make a new token… What a terrible idea.

I suggest that the DEV team needs to hold xALPACA in order to obtain protocol benefits, so that DEV team will better understand the pain of all xALPACA holders.


Use the warchest fund. This is the whole reason it even exists… Or just alocate a portion of revenue to buyback Alpaca and use as incentive.

This is an outrageous proposal. Don’t change the tokenomics of $ALPACA. Why would Alpaca holders willingly accept their investment being diluted?

All this Twitter posting about how $ALPACA is deflationary… just to even propose this is just insulting.

If they decide to increase the cap of $ALPACA, I’m done. If they really need an incentive token approach #3 would be best but only if 40% of revenue from Perps go to $ALPACA holders (similar to staking on Fantom). My suggestion $WOOL: no cap, incentive token which will be used on existing and new products, utility will be solely for staking ve(3,3) style.

Option #4. This should have never been a proposal. Since inception devs have prided themselves on fair launch and deflationary. They were steady. I’m considering selling before “vote”. This isn’t what I thought this project was about.

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All good notes. Only thing I can nitpick is that if the perp exchange isn’t being used, it won’t have liquidations to feed back anywhere.

I also am more careful about declaring something as “should not vote because X.” That’s a slippery slope towards censorship.

On the perp user thing, this is valuable feedback to us. But one thing you have to understand is that there are reasons why a user stays with a product, but the perceived value they need to try a new product is higher. This is called Switching Costs. It means that we need a stronger value proposal than the incumbent product currently being used, because it costs users to switch (learning curve, time, mental energy, sense of security). If the new product’s feature-set is not crushing the competition, marketing to these users through incentives is the most common and most effective strategy. Without that, you are unlikely to attract the existing user base.

As market proof, I can point to dydx and GMX, because that’s exactly what they did. DYDX used airdrop, GMX used a referral program and influencers. The funding for both of those came from new tokens.

Thanks for the feedback.


Thanks for the feedback. To be clear, we never said we need a new token or increase supply. Please read the post again. It says we believe it will increase the chance of success of the new products, which are the future of Alpaca.

You are free to disagree, and anything like this ultimately would have to pass a vote regardless of your or my opinion, but as Alpaca is one of the few projects still thriving deep into the bear market, there’s an argument to be made that we know what we’re doing in terms of product growth and sustainability :stuck_out_tongue:

Let’s be clear on one thing, 100% of the new supply would go towards product growth, because even the staff getting the 9% will be working towards that purpose too. The goal is that the revenues would grow more than the supply. So it’s a strategic move. Just like when companies issue new shares to sell on the market or to investors, in order to raise funds for growth, R&D, and new products. The alternative is no fuel for growth.


At this point the majority of investors is in the red and needs alpaca token to 2x or even 5x to break even on their investments. The suggestion of further diluting investors equity by 49% is not an acceptable proposal for almost anyone in the community as you can clearly see from the feedback.

The proposal of redistributing 10% of investor equity to development hasn’t been explained at all. Does the team urgently need money? How do you justify this transfer of equity from investors towards the team? Is the platform revenue not enough to cover operating costs?

What about the 9% of equity transferred from alpaca holders towards the war chest? The current war chest is still filled. What’s the reasoning for diluting alpaca holders equity further in order to fill the warchest? Are there any projections on what these tokens will be needed for?

I could have understood a proposal of diluting alpaca holders equity by 5% to maybe 15% in order to give incentives to the perp platform. But cutting our equity in half sounds completely unreasonable to me. Without any further explanation this proposal will rightfully yield you a lot of anger and frustration.

Not new tokens, funds for growth. Such funds have to come from somewhere.

I think we can agree that extra funds for growth/marketing increase the chance of a new initiative succeeding? That was the message.

Sam if the issue is looking for funds, why not consider something like getting a loan from TRUEFI (https://truefi.io/)…I’m sure a lot of people would lend to us as we’re a resilient company and we have real revenue

I agree that most of what you said is valid, but there is something you have to understand.

Most companies have the ability to issue stock to raise funds for new products or growth. At the end of the day, if most shareholders agree issuing for growth will be a net positive to the bottom line, they approve it. This is a reasonable and common approach.

The alternative is also reasonable, and one might have different reasons to vote no to growth, but without those funds, you should expect less growth, lower chance of success of new products, fewer new products, less R&D. The reality is people need to eat, you can’t feed blockchain developers with hope :joy:, and you can’t incentivize new users to beat incumbents without incentives. It’s like what was written in option 4, maybe it will work without incentives. The only thing we can be sure of is the chance will be lower. How much lower is detabal,e and that’s one of the questions that should influence which way to vote