Community Update: Introducing the smart minting system and its benefits
May 27, 2022
A new minting mechanism has been forged by the Blueshift team that will supercharge the rewards of those using Blueshift’s Yield Pools and Farms!
For the unacquainted — our Yield Pools are essentially Smart Contracts that allow BLUES token holders to stake their BLUES into this contract. After staking, the BLUES holders receive additional BLUES on a regular basis. This incentivizes holding those precious BLUES tokens — which in turn elegantly solves the market price effect of minting new BLUES tokens.
Similarly, Farms allow Blueshift users to stake LP tokens received for providing liquidity — and for this stake they receive additional BLUES tokens, sometimes with APR rates over 50 %! This means liquidity providing Blueshift users receive both liquidity provision fees as well as the Farms rewards, which can be quite large — depending on which LP tokens were acquired.
The New Approach
At the moment, each block mints 0,1 BLUES tokens as rewards that are distributed to stakers of BLUES and LP tokens.
Minting a relatively small number of 0,1 BLUES tokens per block has two effects. While Yield Pool and Farms rewards remain comparatively small, the inflation of the BLUES token price also remains small as well, thus allowing for a solid price performance.
However, the Blueshift team decided to innovate and design a new minting strategy that will significantly boost the incentives to support the Blueshift platform via staking and liquidity providing.
This will be done by changing the minting strategy in such a way that it produces much more BLUES — but only releases a great portion of it when very ambitious adoption goals are achieved.
This not only protects the value of the BLUES token but it also rewards BLUES stakers in an unprecedented way. To achieve both goals, we have developed the following smart minting system:
1) We increase the minting speed of BLUES tokens
2) We add BLUES tokens selectively as “anchor” tokens to portfolios to keep them in balance
3) We connect staking rewards with TVL goals (Total Value Locked), which in turn — provides further stability to the BLUES token and its price. On top of this even the short-term rewards will be significantly increased from 0,1 to 0,15 as well.
Hence, from Friday, 27th of May onwards, 2 BLUES will be minted each block (instead of 0,1), out of which 0,15 BLUES will be distributed immediately among stakers. This is a 50% increase for those that want to immediately harvest staking rewards.
The remaining 1,85 BLUES tokens will be accumulated each block and unlocked for harvesting once specific TVL goals are achieved. The rationale is that the higher the TVL, the more tokens can be harvested and sold in the market without a significant price dump, thereby reducing the risk of losing money.
In total, the smart minting system will provide a 20x-increase in staking and farming rewards.
This might seem like an overly ambitious and risky approach. However, given that BLUES tokens function as an “anchor token” in every portfolio — the additional staking rewards of BLUES tokens are always backed by the additional increase of TVL across portfolios, including BLUES tokens.
The targets that are set to unlock the massive wave of BLUES token rewards for harvesting are the following:
- $ 200 million Total Value Locked(TVL)
- $ 500 million Total Value Locked(TVL)
All rewards accrued by the users are distributed immediately across their three personal, yet separated, accounts and accumulated (see image below). One account is immediately available for harvesting, corresponding to 0,15 BLUES per block — as stated previously.
The other two accounts are locked for harvesting until the defined TVL goals are reached.
Once the TVL targets are reached the additional BLUES will be claimable via the Blueshift UI.
