- Blue Streak by Premia
- Premia Meta-Economics Revamp & AirDrip details
Premia Meta-Economics Revamp & AirDrip details
Embracing Decentralization, Empowering Stakeholders, and Pioneering Sustainable Growth for the Future
As the Web3 universe matures and evolves, so must the Premia ecosystem.
Over the past two and a half years, we've witnessed remarkable growth across the DeFi ecosystem we call home.
That maturity and adoption require secure, responsive, and responsible DeFi protocols that empower & reward their stakeholders. This has led us to reassess and reinvent our original token meta-economic design.
Premia's new model has been meticulously constructed with the community, empowering stakeholders to amplify their value capture while preserving the true nature of decentralization.
With the community’s interests as project stakeholders upheld and championed, let’s dive in!
Token Allocation Re-Categorizations
Notably, the allocation percentages for different stakeholder groups have been broadly changed.
The initial token allocations did not consider the existence of a DAO-like governance entity, thus there was a need to adapt in order to align the interests of contributors and the community.
For reference, here’s the specification for the original tokenomics: PREMIA Tokenomics.
Premia Allocation High Level Overview
~22% of the total token allocation of 100M has transitioned from Premian Republic (Operator) to Blue Descent (DAO)
~30% of total supply has been allocated for Liquidity Mining. This includes Options Liquidity Mining and the AirDrip Initiative (details for emissions schedule further below).
~20% of total supply has been re-vested for 4 additional years as of Jan 15, 2023 (Founder & Premian Republic allocations)
Premia Allocation Detailed Overview
As mentioned above and previously announced earlier this year, founding allocations that had originally been fully vested have all extended the vesting schedule four additional years to show their commitment to the long-term vision of the protocol.
Additionally, Premia’s circulating supply on Coingecko will be updated soon.
In Premia Blue’s new model, protocol fees and commissions will cascade into three distinct layers: Base, Margin, and Vault.
All rates are subject to change via governance vote and ratification.
Base Layer amasses commissions from the greater of either 3% of premiums paid or 0.3% of the notional value transacted. On Settlement, a fee of 0.3% is collected, not to exceed 12.5% of the option’s value.
Margin Layer is a two-part equation. Firstly, it subtracts 0.4% from the Prime Rate (variable driven by supply and demand dynamics) charged to providers of margin lending liquidity. Secondly, it levies a dynamic liquidation fee that is specific to the wallet positions (see Premia v3 white paper risk model)
Vault Layer includes a 2% per annum management fee and a 20% fee on all positive returns for all native vaults (built in-house). For Vaults developed by third parties, fees will be negotiated ad-hoc on a case-by-case basis.
These fees will be channelled to three groups: Staking Users (vxPremia), Premian Republic, and the Insurance Fund.
Staking Users are allotted 80% of Base Layer fees.
Premian Republic receives 20% of Base Layer fees.
Insurance Fund collects 100% of the fees from the Vault and Margin Layers.
Important Note: Parliament will reconvene every January to re-assess the allocations and amend, any changes will be submitted for a vote before any action is taken. The first meeting will be held in January 2024.
Recap of vxPremia and Voting Influence
Wallets can stake their PREMIA tokens to partake in a pro-rata share of fees derived from the protocol.
Staked tokens become vxPREMIA when locked for a chosen period and cannot be unlocked or withdrawn until that period concludes.
The minimum lock-in period is ten days, a consequence of the 10-day minimum withdrawal period initiated upon unstaking vxPREMIA. Any lock-in duration beyond this is optional but incentivized — the longer the lock, the more pro-rata fee share, and voting influence wallets accrue per staked PREMIA.
Locked vxPREMIA allows for Fee Discounts of up to 60% for EOA’s and 30% for Smart Contracts.
As vxPremia was a natural upgrade to xPremia and there was no contention, this was previously implemented and discussed.
More details can be found on the Premia Docs.
Hydraulic Solutions Framework & Options Liquidity Mining
As an expansion upon the tokenomics changes from November 2022, including the introduction of vxPREMIA and the Manifold Control…
We are happy to announce that we will launch a brand new form of Options Liquidity Mining and DeFi Options Vaults (DOVs), which we call the Hydraulic Solutions Framework.
The Hydraulic Solutions Framework is a suite of smart contracts for other Web3 products to grow and incentivize their respective communities.
Options Liquidity Mining Details
Replacement of traditional token liquidity mining with Premia Call Options
The proposed change allows liquidity providers to receive PREMIA Call options at a 45% discount to the underlying asset’s current market price, replacing the current liquidity mining scheme.
The proceeds, if exercised, will circulate ~90% to vxPREMIA staking users and direct the remaining 10% to Blue Descent DAO.
If not exercised, 20% of the option’s intrinsic value will be locked for 1 year and then provided to the liquidity provider’s wallet.
Protocol Fees will be collected on exercise, and taker fees will be collected if this option is traded on the secondary market. This is built modularly so that any market can be deployed as a physically settled option.
Premia will be the first proposed project adopting these new mechanisms to replace traditional token liquidity mining with Premia Call Options.
The harmonic balance between liquidity providers and staking users is a novel mechanism where both parties will benefit from token emissions.
AirDrip Initiative and Liquidity Mining Emissions Schedule
Initially, 30M $PREMIA tokens were reserved for Liquidity Mining over 10 years, of which 4M have already been emitted.
The new initiative proposes the remaining 26M Liquidity Mining allocation to be divided into two parts: 16M for Liquidity Mining and 10M for The AirDrip Initiative.
16M Liquidity Mining to be split into two buckets of 8M.
8M (first bucket) to be allocated over 4 years in Options Liquidity Mining defined above (2M per year).
8M (second bucket) will be used for potential upcoming ecosystem products outside the Options Exchange.
Welcome to the Premia Blue AirDrip Initiative. No, it’s not a typo.
2M of the 10M tokens allocated to the AirDrip will immediately be dropped to vxPREMIA holders based on their Pro-Rata share of Influence. These tokens will be subject to a 1-year lock-up, separate from users’ existing vxPREMIA locks.
The exact snapshot date for the AirDrip will be communicated shortly (ETA for snapshot date ~July 24th).
Operator, Blue Descent, and Founder wallets will be excluded from the AirDrip.
10M to be used in the AirDrip Initiative, split over multiple years.
2M (first allocation) will be AirDripped on a pro-rata basis to all vxPREMIA staking users
AirDrip amount will be based on vxPREMIA voting influence across all chains.
A snapshot will be clearly communicated (date to be announced shortly ~ETA July 24th).
If a wallet withdraws before its regular staking lockup period and concedes to pay the early withdrawal penalty, the wallet will forfeit any AirDrip allocation, which will be redistributed to staked users.
If the wallet’s natural lockup period expires before the Snapshot Date +1 year, then the allocation shall remain. However, it won’t begin to vest until the Snapshot +1 year date as defined below.
1 year following the Snapshot Date, the Tokens will begin to be dripped out to all eligible wallets monthly (linearly) over the next year.
The entire allocation of 2mm Tokens will then be fully vested and available for claim by Snapshot Date + 2 years.
For the remaining 8M tokens, the Parliament will reconvene in January 2024 with a long-term proposal for allocation.
So, if it still needed to be said, both new and old long-term believers will be rewarded big time.
Public Redux of Economic Market & Investment Access
At Premia, we have a strong belief in community, transparency, and an unyielding commitment to the future of decentralized finance.
To learn more about the Parliament and the context behind the proposals in this article, watch the Premia Parliament community call below.
We are excited to embark on this new chapter together, shaping the future of Premia with this new token economics model. As we continue to grow and innovate, we look forward to your continued support and engagement in shaping the on-chain future of Open Finance.