Dexlyn Tokenomics

1.1 Token Details

• Token Name: DXLYN
• Blockchain: Supra Network
• Token Type: Governance & Incentive Token
• Mechanism: Vote-Escrow (3,3) Model

1.2 Core Utilities of DXLYN

DXLYN plays a crucial role in maintaining Dexlyn's economic stability and governance structure:

• Governance Rights: DXLYN holders can lock their tokens into veDXLYN, giving them voting power over liquidity emissions, fee structures, and key protocol upgrades.
• Liquidity Incentives: The protocol rewards liquidity providers through DXLYN emissions, dynamically allocated based on governance votes.
• Fee Revenue Sharing: A portion of Dexlyn's revenue from trading fees, bridge fees, SupraNS registrations, and IDO launches is distributed to veDXLYN holders.
• Emission Control: DXLYN emissions are distributed based on veDXLYN holder votes, directing incentives toward selected liquidity pools. Protocols can also provide additional incentives (bribes) to attract liquidity. (For a more detailed breakdown, refer to Section 5: Liquidity Pools and Emission Logic.)

2.1 Supply Structure & Allocation

• Initial Supply: 100 million DXLYN minted at the Token Generation Event (TGE).
• Emission Mechanism: Controlled inflation through a decaying emissions schedule.

2.2 Emission Schedule & Decay Model

The DXLYN emission schedule follows a structured two-phase approach designed to ensure sustainable incentives while preventing excessive inflation.

Phase 1: Acceleration Phase (First 12 Weeks)

• During the first 12 weeks, emissions will increase by 2% per week to stimulate liquidity growth and incentivize ecosystem adoption.
• This allows new LPs and veDXLYN lockers to accumulate rewards early, supporting initial adoption.

Example Calculation for Expansion Phase:

• Week 1 Emission: 2% of initial supply = 2,000,000 DXLYN
• Week 2 Emission: 2,000,000 DXLYN x 1.02 = 2,040,000 DXLYN
• Week 3 Emission: 2,040,000 DXLYN x 1.02 = 2,080,800 DXLYN
• This pattern continues until Week 12, ensuring an increased reward pool for early adopters.

Phase 2: Stabilization Phase (Week 13 Onward)

• Starting from Week 13, emissions will begin to decay by 1% per week to slow inflation while ensuring long-term sustainability.
• The weekly emissions still begin at 2% of the initial supply, but after Week 12, decay at 1% per epoch.
• This gradual decay ensures liquidity remains deep while controlling token supply inflation.

Example Calculation for Stabilization Phase:

• Week 13 Emission: Last Expansion Phase Emission x 0.99
• Week 14 Emission: Previous Week Emission x 0.99
• This controlled decay continues over time to gradually reduce emissions while keeping incentives high for liquidity providers.

Impact of This Emission Model:

• Encourages early adopters through increased rewards during the first 12 weeks.
• Prevents long-term oversupply inflation, maintaining a sustainable rewards system.
• Allows gradual adaptation of the Dexlyn ecosystem, ensuring healthy tokenomics balance.

2.3 Rebase Mechanism for DXLYN Pool

To further support long-term lockers, Dexlyn will introduce a rebase mechanism to ensure that veDXLYN holders maintain their governance power and reward share.

How Rebase Works:

• veDXLYN holders receive a rebase proportional to the total DXLYN supply and weekly emissions.
• This rebase protects governance power from dilution, ensuring that long-term lockers maintain their voting strength and incentives.

Rebase Formula:

Breakdown of the Formula:

"Weekly Emissions" – Determines how much DXLYN is being emitted.

"veDXLYN.totalSupply ÷ DXLYN.totalSupply" – Calculates the proportion of locked DXLYN to total supply.

"1 - (veDXLYN / DXLYN)²" – This factor ensures that the rebase is highest when locking rates are lower, creating an incentive for new lockers.

"x 0.5" – The adjustment factor ensures that emissions remain balanced between liquidity incentives and governance participation.

Example Calculation for Rebase Distribution:

• Assume Weekly Emissions = 2% of initial supply = 2,000,000 DXLYN
• veDXLYN.totalSupply = 20,000,000 DXLYN
• DXLYN.totalSupply = 100,000,000 DXLYN
• Applying the formula:

Key Effects of Rebase:

• Prevents dilution of long-term veDXLYN holders.
• Encourages new locking to maintain strong governance participation.
• Does not affect liquidity provider rewards, ensuring LP incentives remain intact.

3.1 Revenue Sources

Dexlyn generates revenue from various streams, ensuring financial sustainability:

• DEX Trading Fees: Earned from token swaps executed on the platform.
• Bridge Fees: Charged for cross-chain transactions.
• IDO Listing Fees: Fees collected from projects launching their tokens.

3.2 Fee Distribution Mechanism

• 50% of platform fees are used to buy DXLYN from the open market, then redistributed to veDXLYN holders.
• 50% of collected fees: fund protocol operations, liquidity incentives, and future ecosystem growth.
• Weekly Payouts: Fees are distributed proportionally based on veDXLYN holdings.

4.1 Locking DXLYN into veDXLYN

• Lock Durations: Ranges from 1 week to 4 years.
• Weighting Mechanism: veDXLYN is determined using the formula:
  
• Example Calculations:
  • Locking 1000 DXLYN for 1 year = 250 veDXLYN (since max lock is 4 years).
  • Locking 1000 DXLYN for 4 years = 1000 veDXLYN (full governance power).
  • Locking 500 DXLYN for 2 years = 250 veDXLYN.
• Decay Model: veDXLYN balances decrease over time, requiring periodic re-locking to maintain voting power.

4.2 Governance and Voting

• Liquidity Gauge Voting: veDXLYN holders participate in governance by voting on emission allocation for liquidity pools.
• Emission Adjustments: Votes update weekly, enabling an adaptive distribution model.
• Bribe Markets: Projects and liquidity providers can offer external incentives to veDXLYN holders in exchange for votes, encouraging competition among pools.

4.3 Economic Incentives

• Higher Emissions Share: veDXLYN holders benefit from increased rewards due to their locked stake.
• Bribe Rewards: Holders earn additional incentives from projects competing for emissions votes.
• Anti-Dilution Protection: Long-term locking ensures voting power remains stable, reducing governance dilution.

5.1 Liquidity Gauge Basics

• Every liquidity pool (LP) on Dexlyn's DEX and Dexlyn locking pool has a gauge.
• Liquidity providers stake their LP tokens in the gauge that will receive the votes.
• veDXLYN holders vote with their veDXLYN balances to direct weekly emissions.
• The more votes an LP gauge receives, the more DXLYN emissions are allocated.

5.2 Governance and Emission Voting

• Emission Gauges: Each liquidity pool has a gauge that can receive DXLYN emissions, subject to a maximum allocation cap per pool to ensure balanced distribution.
• Weekly Emission Vote: veDXLYN holders vote on which pools receive the next epoch's DXLYN emissions.
• Bribing Mechanism: Protocols and projects can offer bribes (typically in other tokens) to veDXLYN holders in exchange for votes on their liquidity pool gauge.
• Emissions Allocation: The more votes a liquidity pool gauge secures, the higher the DXLYN emissions allocated to its stakers. This mechanism ensures that liquidity is directed toward the most in-demand pools, optimizing capital efficiency and rewarding active participants.

Example: How Emissions Flow Works

• Liquidity Provider (LP) Adds Liquidity:
  • Alice provides 1000 USDT and 1000 DXLYN into a liquidity pool.
  • She receives LP tokens representing her share of the pool.
  • She stakes the desired number of LP tokens in the corresponding pool gauge that will be available to receive votes from veDXLYN holders.
• veDXLYN Holders Vote on Pool Gauges:
  • Bob, a veDXLYN holder, votes 30% of his voting power on the USDT-DXLYN pool gauge.
  • Other veDXLYN holders also vote on various pools gauges.
• Dexlyn Protocol Allocates Emissions Based on Votes:
  • The total weekly emissions amount to 2,000,000 DXLYN.
  • The USDT-DXLYN pool gauge receives 20% of total emissions due to high votes.
  • That means 400,000 DXLYN is allocated to this pool, subject to the maximum emission cap for the pool.
• Alice's Share of Emissions:
  • Alice has 5% of the total staked LP tokens in the USDT-DXLYN Pool Gauge.
  • Since Alice holds 5% of the staked LP tokens, she gets 5% of the emissions allocated to that pool.
  • 5% of 400,000 DXLYN = 20,000 DXLYN distributed to Alice.
• Emissions & Rewards Distributed to Stakers:
  • Alice earns 20,000 DXLYN emissions, subject to the pool cap limit + bribes from projects incentivizing the pool.
  • She can claim her rewards, reinvest, or withdraw liquidity.

This process ensures that higher liquidity providers earn more rewards, and pool emissions are allocated fairly based on governance votes.

Furthermore, this governance model encourages competition among protocols, creating an efficient and self-reinforcing liquidity market.

• Weekly Emission Vote: veDXLYN holders participate in a weekly vote to determine which liquidity pools receive DXLYN emissions for the next epoch.
• Bribing Mechanism: Projects seeking more liquidity can offer additional incentives (bribes) to veDXLYN holders, typically in stablecoins or project-native tokens, to encourage voting in their favor.
• Incentive Alignment: This model creates a competitive environment where liquidity naturally flows toward the most rewarding pools, ensuring sustainable emissions distribution.

5.3 Weighted Voting and Penalties

• Max 100% Voting: Each veDXLYN holder can distribute votes across multiple gauges according to their preferences.
• Penalty for Vote Switching: Optionally, to prevent rapid gauge flipping, a small penalty or time delay may be imposed when changing votes.
• Compounding Effect: Bribing markets boost competition, strengthening liquidity incentives without unnecessary inflation.

6.1 Bridge Liquidity & Fee Sharing

Dexlyn's bridge functionality facilitates effective asset transfers across supported blockchains while incorporating an incentive model that rewards long-term participants. Bridge fees are a key revenue stream that is partially distributed to veDXLYN holders.

• Transaction Fee Splits:
  • 50% of all bridging fees are used to buy DXLYN from the market, which is then distributed to veDXLYN lockers as rewards.
  • The remaining 50% is directed toward protocol maintenance, security, and operational costs such as chain relayer expenses.
• Bridging Incentives:
  • veDXLYN holders enjoy discounted bridging fees. For example, if the standard bridge fee for a transaction is 0.2%, veDXLYN holders could receive a 10% discount, reducing their fee to 0.18%.
  • High-value cross-chain liquidity providers can bribe veDXLYN holders to direct emissions toward bridge liquidity pools, increasing the incentive for deep liquidity.
• Example: If Dexlyn processes $50 million in bridging volume in a month with an average fee of 0.2%, it generates $100,000 in fees. Based on the 50% allocation rule, $50,000 worth of DXLYN is purchased and distributed to veDXLYN holders, reinforcing their commitment to the ecosystem.
  • veDXLYN holders receive a portion of bridge fees.
  • Governance determines emissions allocation to bridge liquidity pools.
  • Example: Suppose Dexlyn facilitates $10 million in bridge transactions weekly, generating $50,000 in fees. If 50% of these fees are allocated to veDXLYN holders, $25,000 worth of DXLYN would be purchased and distributed proportionally among them based on their locked balance.

6.2 IDO (Initial DEX Offering) Mechanics

Dexlyn's IDO launchpad provides new projects with decentralized fundraising while aligning incentives between token holders and liquidity providers.

• Listing Fee:
  • Projects must pay a listing fee in DXLYN or stablecoins to be eligible for an IDO.
  • 50% of all IDO listing fees are used to buy DXLYN from the market before being distributed to veDXLYN holders, rewarding those who actively govern the platform.
• Token Allocations & IDO Tiers:
  • IDO projects can bribe veDXLYN holders to increase gauge voting and prioritize their token emissions.
  • veDXLYN holders may receive exclusive early access or higher-tier allocations in IDOs.
• Post-IDO Liquidity Incentives:
  • Newly launched tokens can immediately create liquidity pools on Dexlyn.
  • Projects incentivize veDXLYN holders to direct emissions toward their liquidity pools, ensuring post-launch liquidity depth.
• Example: If an IDO project pays a 100,000 DXLYN listing fee, 50,000 DXLYN is distributed to veDXLYN holders. This model benefits both long-term lockers and projects seeking liquidity post-IDO, reinforcing a sustainable growth cycle.
  • IDO projects pay listing fees in DXLYN.
  • veDXLYN holders vote on project prioritization and token emissions.
  • Example: If an IDO project wants to list on Dexlyn, they might pay a 100,000 DXLYN listing fee. 50% of this fee is distributed to veDXLYN holders, meaning long-term participants benefit from project launches.

6.3 SupraNS Name Service Utility

SupraNS enables decentralized identity and domain name registrations within the Dexlyn ecosystem. veDXLYN holders gain preferential treatment when interacting with SupraNS services.

• Domain Registration Fees:
  • Users pay fees in $SUPRA to register and renew names on SupraNS.
  • 50% of all SupraNS fees are used to buy back DXLYN from the market, which is then distributed to veDXLYN holders as rewards.
• Priority Registrations & Discounts:
  • veDXLYN holders receive priority access to premium domain names before public auctions.
  • Holding veDXLYN reduces renewal fees, incentivizing long-term commitment.
  • veDXLYN holders receive discounted domain registration fees.
  • Governance can propose and vote on new service integrations.
• Example: Suppose registering a SupraNS domain costs 500 $SUPRA, Dexlyn will allocate 50% of collected fees to buy DXLYN from the market before distributing rewards to veDXLYN holders.
  • A veDXLYN holder with governance power could receive a 20% discount, lowering their cost to 400 $SUPRA This allows governance participants to receive tangible benefits beyond voting rights, reinforcing token utility.

7.1 Proposal Process

• Proposal Submission: Any veDXLYN holder can submit a governance proposal detailing changes such as adjusting fee parameters, modifying emissions, or introducing new liquidity pools.
• Voting Period: veDXLYN holders vote within a specified timeframe. Longer-locked DXLYN equates to more voting power.
• Implementation: If a proposal receives majority approval, the change is implemented in the subsequent governance update.

7.2 Examples of Governance Decisions

• Fee Adjustments: A proposal to modify the bridge fee from 0.2% to 0.15% to attract more cross-chain liquidity.
• Liquidity Incentives: A project seeking additional liquidity may propose increased emissions for their trading pair.
• New IDO Listings: veDXLYN holders vote on which new projects gain access to the Dexlyn IDO launchpad.
• SupraNS Enhancements: Adjusting domain registration fees or governance rights for name services.

By tying governance power to locked DXLYN, the protocol keeps decision-making aligned with the best interests of long-term participants, mitigating speculative governance influence and reinforcing sustainable growth.

• veDXLYN holders vote on major protocol decisions.
• Proposals include changes in emissions, fee structures, and liquidity pools.

Key Benefits:

• Long-Term Alignment: The governance structure allows the most committed community members to influence key decisions, such as emissions allocation, fee structures, and platform upgrades.
• Self-Reinforcing Liquidity: The gauge voting system and bribing incentives allow liquidity providers to compete for emissions, leading to deep liquidity pools without excessive inflation.
• Ecosystem Synergy: Revenue from bridging fees, IDO listings, and SupraNS registrations diversifies income sources, strengthening the DXLYN token’s utility beyond traditional DEX mechanics.
• Scalability & Adaptability: As new features, services, or cross-chain expansions are introduced, the same veDXLYN voting mechanism can be applied to direct incentives and govern new revenue streams.