Tokenomics Update Proposal
Following a series of international discussions, the Deri team is moving forward with a draft for a DIP proposal to update the DERI token’s tokenomics and adjust the allocation of trading fees.
Introduction and reasoning
The purpose of this proposal is to make a strategic change in the tokenomics of the protocol to ensure its long-term growth and sustainability. By allocating 50% of the protocol fees directly to the treasury, Deri would access essential resources to foster development, expand marketing efforts, attract more traders, and enhance the protocol’s visibility and utility in the market. Ultimately, as the protocol grows, it will positively impact the overall value of both the protocol and the $DERI token.
In addition, we propose to discontinue the current referral program, which has not demonstrated sufficient effectiveness. Throughout 2024, the referral system attracted only 30 traders, generating less than $150 in monthly fees for referrers on average. These figures indicate that the program has limited impact on growth and does not justify the continued allocation of resources.
The team is exploring alternative approaches to promote referrals more effectively, potentially leveraging the treasury revenue mentioned above to fund a more impactful program that better aligns with our growth objectives.
Current tokenomics
Our current tokenomics structure distributes trading fees as follows:
- 20% to liquidity providers
- 0 to 40% to brokers/referrers
- 40 to 80% to the protocol
The fees accumulated by the protocol are then used to buy $DERI on the open market and burn it at the end of every month.
Proposed changes
We propose the following changes:
- 20% to liquidity providers
- 40% to the protocol and used to buy and burn $DERI tokens
- 40% to the protocol and sent to the treasury
The revenue accumulated by the treasury will be dedicated to initiatives aimed at growing the protocol. This may include marketing/promotion initiatives such as:
- Sponsoring events like trading competitions
- Engaging with KOLs/influencers
- Incentivizing user engagement through additional rewards
- Providing incentives for users who refer new traders to Deri
Additionally, the treasury funds could eventually be used to support operational expenses, including infrastructure and other essential costs.
One of the potential initial applications of this change would be to sponsor rewards for new traders who engage with our Telegram mini-app, with the goal of significantly expanding our user base on that platform. This could be viewed as an acquisition cost for new users, utilizing the fees generated by our own protocol. By investing in user acquisition through this approach, we reinforce a positive feedback loop that fosters sustained user growth.
What it means for $DERI holders
We recognize that this change will reduce the burn rate, meaning the DERI token price may not experience the same “natural” upward pressure from each purchase and burn event. However, the redirected revenue will empower us to acquire more traders through enhanced marketing and growth activities, ultimately increasing the protocol’s valuation. In essence, this approach invests a portion of what would have been burned directly into the protocol’s growth, aiming for a long-term boost in value.
What it means for Deri users
For regular users, this change would not impact your experience.
For referrers, while the current on-chain referral system will be discontinued, we are working on a redesigned referral program that aims to offer higher rewards for referrers and bring greater benefits to Deri overall.
What will happen now
At this stage, we are simply opening up this proposal to the public. We invite everyone to join the discussion, which will remain open until the end of next week. Based on your feedback, we will finalize and submit a Deri Improvement Proposal (DIP) for a community vote. Please share your thoughts with us on Telegram and Discord.
