YBX Tokenomics

YBX's tokenomics were designed with the goal of creating a productive platform asset which enables its holders to benefit from every part of the YieldBlox Protocol.

The Five Levels of YBX Productivity:

YBX's tokenomics model has five levels of asset productivity protocol participants can engage in to get the most value out of their YBX tokens.

Level 1: YBX issuance distributes governance power for lending and borrowing on YieldBlox.

The foundation of YBX tokenomics is the YBX distribution mechanism which awards lenders and borrowers YBX for lending and borrowing using the YieldBlox Protocol. This on-ramps new users into the governance system and ensures that the majority of governance control will be distributed to YieldBlox's most committed users. YBX incentives decrease logarithmically over time.

Level 2: Users can escrow YBX to participate in governance.

YBX holders can escrow their YBX for veYBX to begin participating in protocol governance. YBX issuance may also be allocated to YBX escrows and, in the future, it's possible that governance decides to allocate a portion of interest fees to YBX escrows by using a portion of interest to repurchase and distribute YBX.

Level 3: Users can escrow YBX:USDC or YBX:XLM AMM shares to earn AMM fees.

Using AMMs on the Stellar Network, YBX holders are able to escrow YBX:USDC or YBX:XLM AMM shares to receive veYBX at the same rate as locking just YBX. Not only will they get the typical benefits of escrowing, they will also earn trading fees from the AMM shares. This benefits both the protocol and the user, as the YieldBlox Protocol regularly trades YBX through normal protocol operations. This feature is not yet implemented, but it is one we hope is added by protocol governance down the line.

Level 4: Users can use their escrowed YBX or YBX AMM shares as collateral to borrow in the YieldBlox protocol.

Users are permitted to use escrowed YBX as collateral and borrow against it. This allows them to gain liquidity on their escrowed YBX and receive YBX issuance for borrowing.

Level 5: Users can use veYBX to vote on the allocation of YBX issuance to different lending pools.

Users who escrow YBX receive veYBX, which can be used to vote on incentive allocation governance proposals. These proposals are used to determine how YBX issuance is divided between the lenders and borrowers of assets supported by the YieldBlox Protocol. Users can vote to increase incentives to certain assets to reward lending or borrowing.

This is valuable for anchors that want to distribute governance power to users who lend their anchored asset. A fintech platform anchoring their native platform asset could use veYBX to vote to increase issuance for lenders of their platform asset. This would expand the benefits their platform offers users. Normal users can vote to increase the incentives allocated to the assets they are currently lending or borrowing.

Last updated