Thoughts: Reduce SEFI max supply to 500 Million

Interested in the community’s thoughts…

  • What are the negatives to such a change?
  • What are the positives to such a change?

Thoughts

  • Less supply more scarce…
  • Price appreciation…

What was the reason 1B max supply?

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If you reduce the circulating supply to 500m (and we’re currently at c.300m) - that means SecretSwap would effectively need to be worthwhile for people to LP in much, much sooner as SEFI could no longer be used to incentivise LPing once the market cap has been reached.

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Uniswap has the same max supply. A proposal to buyback and burn with part of trading fees has already passed.

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UniSwap does not incentivise pooling, SecretSwap does. Remove the incentivised pooling and I don’t see very many people staying on SecretSwap.

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What would be the reason for a 500M supply?

The supply number is arbitrary. Keeping the max at a nice even number makes calculating the market cap easier. Lowering the max supply by half while 20% through the planned allotment seems dishonest to investors. Furthermore it wouldn’t lower the circulating supply, which more directly relates to current supply and demand. The lowered max supply would either significantly nerf the current APY’s, or the duration for which incentivized pools would last. Either direction would disincentivize liquidity, and therefore hurt the utility of the SecretSwap dApp.

I like that your mind is actively working on value-capture for SEFI! Keep at it, and we’d love to have you at our SecretSwap Committee meetings on Wednesdays at 4:00PM UTC. This specific example would not be pragmatic, nor good practice.

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