With our new launch approaching, we wanted to outline the exact changes that users can expect to see, and our reasons for each.
The goal of this relaunch is simple at its core — to bring Lava to a point where it is sustainable, utility-driven, and growth focused. With the current market conditions, it’s difficult to do that on our existing tokenomics model, so we are pivoting and making the changes required to propel the project forward.
Here are the key changes:
New LAVA token launching on Swapsicle at $0.25, with a stabilization target of $0.30
We deliberated as a team on whether it made sense to go with a price stabilization mechanism, since it is essentially a buyback mechanism that is written to hold a specific price. The pros are that it enables us to really push the LAVA/USDC farm on Swapsicle, gives future investors confidence in getting their return, and makes it so current investors don’t have to just race to see who can suck liquidity out at the highest price. The main con is that it will technically cause our LP to drain faster. But with the other changes, we feel it is ultimately the best decision to proceed with stabilization.
LAVA/USDC pool with POPS as the rewards token
Due to the price of LAVA being stable around $0.30, and LAVA being paired with USDC, users will be able to enjoy the high APR of a farm that is virtually no risk, as far as impermanent loss goes. An initial rate of ~50% APR will be available, however once LAVA emissions are implemented, we expect the rate to increase considerably.
Flex node will be removed
The original intention of the flex node was to lower the barrier of entry to Lava. Being that the new token will have a price stabilized at $0.30, that sets the price of the lowest tier node at $30, which we feel is a low enough entry for most people. The nature of the flex node ended up causing a lot of headaches when trying to balance around the new tokenomics, since it ended up being a loophole on multiple fronts. However, we are looking into an auto-compounding solution that would enable easy compounding into the Swapsicle farm.
Current LAVA rewards will be reduced by 20%
An equivalent amount of LAVA will be provided to Swapsicle to help support the farm and sustain an attractive APR. These tokens need to come from somewhere to avoid excessive inflation, so a broad reduction made the most sense.
After TrueROI value has been reached, nodes will shift to revenue-share only
This is one of the biggest changes that will reduce emissions by around 50%. In the beginning, the revenue share will be lower, but everything you receive will be 100% profit, with only room to grow.
Any node that has been compounded will continue to emit pLAVA at a 50% rate
This is to reward our loyal compounders and those who have believed in the long term vision of the project.
Compounding will now count towards 50% of your TrueROI value
In order to give more value to users who choose to compound, they’ll be able to essentially create two revenue and pLAVA-generating nodes for each one purchased.
In order to give the fairest and most accurate TrueROI numbers, each user’s TrueROI value will be set to the total amount they’ve invested into the project, minus any amount sold, and this will be averaged across all current nodes. All previously compounded nodes will have 50% of their LAVA value (at the time of compounding) reduced from their TrueROI.
No maintenance fees for compounded nodes
Maintenance fees for non-compounded nodes will remain at 20%/month. For compounded nodes and nodes that have reached ROI, the fee will simply be 20% of the revenue share paid out to that node, and will be sent to the Treasury for continued growth of the protocol.
TrueROI values will be reset to the amount spent on the project
Moving forward, TrueROI values will be set from the actual dollar amount invested into Lava, instead of the price that the node was created at.
Claim tax will be set at a flat 15%
We removed the increasing claim tax since it doesn’t align with the new tokenomics.
Sales tax is being reduced to 5%
This is to allow less friction when exiting positions on the LAVA/USDC farm, while retaining a small % to continue a flow of capital to the treasury.
LAVA token swap
All existing rewards from the old contract will be able to be swapped at a 1:1 rate for the new LAVA token, OR to pLAVA at a 50% boosted swap rate.
If you’re someone who wants to continue to build your stack of nodes, consider swapping into pLAVA directly. For example, swapping 500 old LAVA would yield 750 new pLAVA.
In the not-so-distant future, nodes will be capped and opened up for trading as NFTs. This will preserve the value of existing nodes by not inflating them with new node creation. We also have plans to implement node buybacks and burns, sweeping the floor and increasing the revenue share percentage for all existing holders.
As part of Lava’s revenue share protocol, we will be releasing an investment dashboard as part of the dApp shortly after launch.
From there, users will be able to track allocations in investments, make additional contributions to projects, and claim all in one place.
The ultimate goal of this transition period is to allow those who want to just get their ROI back do so, and allow those who want to build their stack of nodes in anticipation for higher revenue down the road the opportunity to do so. These revenue-share-only nodes will be able to offer perpetual and actually sustainable returns based on the treasury’s investments and Lava’s sister projects.
Keep an eye out for the coming updates on our sister project development and the release of our investment dashboard.