Tokenomics
Savvy's tokenomics approach centers around the use of the SVY token, which is an ERC20 standard token that controls the protocol's governance. As part of our tokenomics design, the SVY token integrates with the protocol to enhance health and community. The SVY token has several utilities for users of the Savvy Protocol. Specifically the structure incentives participants to:
Users need to possess SVY in their wallets to gain access to the protocol's smart contracts, which allow for depositing and borrowing. This means that in order to participate in the protocol, users must hold and use SVY.
Borrowers can earn more SVY by staking their tokens to boost their collateral's APY in the form of boosted rewards. This creates a positive feedback loop where users are incentivized to hold and use SVY, which in turn creates more demand for the token and helps to establish a stable economic model.
The SVY token is used to give token holders significant influence on the distribution of liquidity through voting on gauges. This means that token holders have a say in how future liquidity will be distributed to the svToken pools, which is an important aspect of the protocol's overall success.
6 years long-term emission schedule and continuous distribution. Community is the largest holder of current and future emissions.
The total supply of SVY is capped at 10 million tokens. After the Fair Launch, the remaining tokens are emitted on a monthly schedule over 6 years. The breakdown of token allocation is designed to ensure a balanced distribution among different stakeholders, focusing on long-term incentives for growth and development.
37.5% (3,750,000), the largest portion of emissions, is allocated to Liquidity Mining rewards to ensure price stability and deep liquidity for our svTokens. 21.5% (2,150,000) of the token supply is allocated to the Fair Launch, specifically 15.5% (1,550,000) for the Liquidity Generation Event and 6% (600,000) for the Liquidity Bootstrapping Pool. 13% (1,300,000) is allocated to the Savvy DAO to ensure decentralized governance of the project. 10% (1,000,000) is allocated to the Treasury to cover development costs for the project. 10% (1,000,000) is allocated to the core team to ensure their committed execution. 6% (600,000) is allocated to veSVY (Boosted Rewards) to reward long-term borrowers. Lastly, 2% (200,000) is allocated to Ecosystem Development to support growth for the ecosystem around the Savvy Protocol.
The vote-escrow token (veToken) model is designed to align incentives between users and the protocol by encouraging token holders to stake protocol tokens long-term to earn veTokens. The longer the tokens are staked, the more veTokens are earned per second, which equates to more weight in governance voting, staking rewards, and third-party rewards. Many DeFi protocols, such as Curve, Balancer, Platypus, and Trader Joe, have adopted similar models.
Savvy uses this no-lockup veToken model, where users can freely stake and unstake their SVY tokens to earn veSVY tokens. The longer the SVY tokens are staked, the more utility these tokens have. The claimed soulbound veSVY tokens are non-transferable and non-sellable. If a user unstakes their SVY, their veSVY balance is entirely removed. A single staked SVY token generates 0.014 veSVY every hour, and the veSVY balance can accrue up to 100x the staked SVY balance.
Users are eligible to claim boosted SVY rewards based on their veSVY and debt balances in relation to the total protocol balances. Boost is calculated as the following:
Last modified 7d ago