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Tokenomics ‍⚖️

PPO is prePO’s governance and utility token.

PPO's tokenomics design incentivizes high-quality, active participation and long-term alignment.

Earning PPO

PPO can be earned by being an active user and adding value to the prePO protocol.

Traders earn PPO through:

  • Trading fee reimbursements
  • Ranking highly in leaderboard contests
  • Performing well for your copy traders
  • Participating in each market’s comment section
  • Staking PPO for future distributions

Pregens earn PPO through 'governance mining', receiving retroactive rewards for participating in governance and contributing to the prePO DAO.

Stake PPO

By staking PPO, Pregens receive PPO Power (a non-transferable ERC-20 token).

PPO Power can be multiplied by staking for longer (time multiplier), unlocking achievements (achievements multiplier), or consuming power boosts (boosts multiplier).

PPO Power formula

A Pregen's influence in governance and share of future PPO reward distributions is decided algorithmically by their share of overall PPO Power.

Importantly, only Pregens who remain active, either through governance or on the platform, will receive staking rewards. If a Pregen becomes inactive for an extended period of time, their rewards will be paused and redistributed to other stakers instead.

Since high multipliers accrue to active long-term stakers, PPO - and the future of the protocol - ultimately ends up in the hands of Pregens with long-term conviction, rather than short-term speculators.

Staking Rewards

Stakers receive a share of all protocol fees, including any fees for trading, deposits, withdrawals, or early unstaking. These fees are first used to buy-back PPO, and then automatically compounded into each staked PPO position.

Stakers also receive a share of all PPO spending, and bonus PPO emissions from the treasury, depending upon what percentage of total PPO is staked. If a low percentage of PPO holders are staking, then bonus emissions will be high; if a high percentage are staking, then bonus emissions will be low. This mechanism further incentivizes everyone to stake, thus creating a long-term aligned community.

Bonus Emissions Chart

Staked PPO as Collateral

Staked PPO may be used as collateral for loans.

The prePO treasury will act as the lender, providing assets (such as USDC, ETH, or even PPO) for borrowing. If a loan isn’t paid back in time, the staked PPO will be claimed by the treasury and redistributed to stakers as an additional staking reward.

Spend PPO

PPO can be spent on exclusive PPO-denominated purchases, such as power boosts to multiply PPO Power, consumables for gated community access, virtual cosmetic items, physical merch, gamification event items, and more.

Spent PPO is then redistributed amongst PPO stakers, boosting staking APY.

Bond for PPO

prePO utilizes a custom bonding mechanism, where assets such as ETH or USDC can be sold to the prePO DAO Treasury in exchange for staked PPO tokens at a discounted price (driven by supply and demand).

Liquidity Redirection

Assets accumulated by the treasury are used for dynamically redirecting liquidity between prePO markets.

Allocations across each market will be continuously voted upon by PPO stakers, who are strongly incentivized to maximize protocol revenue.

Bond PPO Diagram

Protocol-Owned Liquidity

Treasury assets are also used to bootstrap liquidity for the PPO token, such that the majority of PPO token liquidity is owned by the protocol.

With protocol-owned liquidity, PPO trading fees will provide a constant source of revenue for the protocol, which can then be used to buy-back PPO and distribute amongst PPO stakers.

This revenue is amplified through the adoption of advanced LP strategies, enabled by Uniswap V3.

Vote with PPO

Since prePO is a decentralized protocol, PPO stakers are responsible for governance.

PPO Power can be used to submit and vote on proposals, including for new markets, market resolution, fee adjustments, liquidity redirection, representative council members, and how treasury funds should be used.

In the future, stakers will be able to delegate their voting power to someone else.