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Tokenomics (SPA)
Token flow

Emission Rate Model

We will be pioneering a new emissions rate model: Stable Pegged APR (SPA), which will be critical to our success of managing a sustainable AMM. In Typical yield farms, emissions rates are set at a fixed number per block. This model if not managed well, tends to be unsustainable, and results in over-inflation, while resulting in low benefits for the AMM platform. Our team has pioneered a new formula for managing emissions rates which will serve as a strong support for price for the token to ensure token value is sustainably increased. At the same, this model will ensure a juicy APR for all potential yield farmers that will be joining us.

Metholodogy

Our methodology - The Stable Pegged APR (SPA): Across all different AMMs, with varying tokenomics, there's but one biggest consistency: Stable USDT-BUSD, USDC-BUSD etc pairs generally have a widely agreed upon APR that yield farmers will agree to - roughly ~20% APR. As such, our tokenomics will rely on the stable pairs as a source of truth, we will peg our APR to the rate of returns that stable farming pairs will receive on our platform. To do so, we have written a formula to ensure a floating rate APR for stable pairs to be at least 23%. We use 23% instead of 20% (to guarantee value for stable pair yield farmers), because our platform charges 3% deposit fees, which is critical for us to maintain this tokenomics of ours, which we will seek to explain. We are expecting our APR to be double of market's APR.

How does this work?

How does this model work? APR is affected by 3 main things, emissions rate (SQUID per block), and price of token (dollar per SQUID), total liquidity locked (USDT-BUSD staked). A simple way to look at how we intend to make this model work is by ensuring we get a stable APR for USDT-BUSD at between 23% to 80% (arbitrary). Whenever APR dips below 23%, the team will perform a buyback of SQUID to push APR up to > 23%. Whenever APR goes above 80%, the team will reduce emissions to ensure SQUID becomes more deflationary, and normal market forces will seek to push up the prices of SQUID further. However, the adjustments will be done real time and depending on what our team determine is best for SQUID. The APR will vary for each pair
The above is a simple view of how the mechanisms will work. However, the above alone is not sustainable. The platform needs to experience growth, and new funds, in order for the system to continuously fuel growth for everyone. To do so, the team will set internal targets for TVL growth. Not to mention, our platform will also earn funds from: 1) Swaps, 2) NFT boosts. A large portion of all funds earned on the platform will go back towards the buyback fund for SQUID to ensure a Stable Pegged APR for all. This model is sustainable because emissions rates are pegged to platform growth, and emission rates are continuously reduced to ensure higher token value.