Maple Finance is contemplating spending its earnings from protocols to repurchase SYRUP tokens and then give these tokens out as prizes to those who stake, according to a governance proposal they posted on January 13th.
The suggestion under consideration requires approval from token holders. If approved, it will assign 20% of Maple’s monthly earnings from the protocol to be used for buybacks. This move is intended to motivate those who stake. Voting commences on January 20th, as announced by Maple.
1) Purchases will be made through decentralized marketplaces (DEXs) and direct negotiation platforms (OTC), as stated in the proposal. As per the latest data available up to January 13, Maple’s on-chain lending service has been generating approximately $5 million in annual income.
The DAO [decentralized autonomous organization], as stated in a recent proposal, plans to give back tokens they’ve bought back to those supporting the SYRUP project. This gesture is meant to appreciate and reward individuals who are dedicated to the long-term prosperity and expansion of the Maple ecosystem.
As an analyst, I’d rephrase that statement as follows: “By rewarding SYRUP stakers based on the protocol’s performance, we can ensure that their interests are closely tied to the success of the protocol itself.
Maple stated that buybacks will enhance the rewards for current stakeholders, who currently benefit from incentives due to inflationary SYRUP emissions. According to the plan, stakeholders would receive approximately 20% of the newly minted SYRUP each year, which equates to about 1% of the total SYRUP supply annually.
According to the existing amount of SYRUP that’s been staked, Maple estimates that the potential return rate on your staked SYRUP (stSYRUP) would be approximately 5.0% per year if we annualize it.
Approximately 80% of yearly SYRUP emissions, equating to around 4% of the total annual supply, will be retained within the protocol’s treasury, according to their statement.
The value of the SYRUP token is presently estimated at around 88 million dollars, as per CoinGecko’s latest data.
Value-accrual in DeFi tokens
Decentralized Finance (DeFi) platforms are facing growing demands to distribute a portion of their earnings to token holders. Innovative projects like Aave, Ethna, and Ether.fi are experimenting with methods to create value for their own tokens.
This development is partially attributed to the fact that the favorable stance towards cryptocurrency shown by President-elect Donald Trump following his November 5th US election victory is expected to lead to a more welcoming regulatory atmosphere for Decentralized Finance (DeFi) protocols, as stated by asset manager Grayscale in December.
On November 15th, the stablecoin issuer, Ethena, decided to distribute a proportion of its approximately $200 million in earnings from its protocol to its token holders.
In December, the company behind the Liquid Restaking Token (LRT), Ether.fi, suggested using 5% of the protocol’s earnings to purchase their native ETHFI tokens and then distribute these tokens among the token stakers.
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2025-01-14 19:16