Context
The low trading volume on MUX has been concerning recently. To stimulate more trading activities, MUX contributors will lower the base open and close fee rates from 0.075% to 0.06% for MUX Native and Degen positions.
LP retention has been more challenging since the MUXLP staking APR is relatively low due to low trading volume. To prevent the lowered fee rate causing further LP outflow, MUX contributors propose allocating 15% protocol income currently allocated for veMUX holders to MUXLP stakers.
The proposed change will temporarily decrease veMUX holders’ income share, which is non-ideal. However, since MUX urgently needs to onboard more traders while ensuring a healthy TVL to support trading activities and generate fees, the contributors would sincerely appreciate it if veMUX holders could make this temporary sacrifice to help the protocol pass this challenging time.
Proposal
MUX contributors propose to update the protocol income distribution as follows:
From
- MUXLP Income Distribution
- Total Protocol Income × (70% × POR + 30%): Allocate for veMUX holders (in ETH)
- POR is the rate of Protocol Owned Liquidity
- Total Protocol Income × 70% × (1 - POR): Allocate for MUXLP stakers (in ETH)
- Total Protocol Income × (70% × POR + 30%): Allocate for veMUX holders (in ETH)
To
- MUXLP Income Distribution
- Total Protocol Income × (85% × POR + 15%): Allocate for veMUX holders (in ETH)
- POR is the rate of Protocol Owned Liquidity
- Total Protocol Income × 85% × (1 - POR): Allocate for MUXLP stakers (in ETH)
- Total Protocol Income × (85% × POR + 15%): Allocate for veMUX holders (in ETH)
Next Steps
- Community discussion surrounding this proposal
- Community members vote to approve/disapprove of this proposal