Brainstorming a new/updated tokenomics model for LPT

I’ve already posted about the Morpheus AI tokenomics on discord: Discord
I think their model has some interesting properties which might be worth adopting for Livepeer - especially the more efficient usage of the inflationary LPT and protocol owned liquidity.

So here’s an idea for an updated tokenomics model for LPT:

  • Instead of being payed in ETH for winning tickets, Os get payed the same amount in LPT. So each round, a portion of the inflationary rewards (similar to the treasury) is allocated for that. As an alternative, maybe we can also just use the treasury for that.
  • The Bs keep paying for transcoding work in ETH. But if an O redeems a winning ticket from a B, the Bs ETH gets transferred to a protocol owned liquidity contract and the O is payed with LPT.
  • The collected ETH is used to add liquidity to a 50/50 Uniswap LPT/ETH pool (or an 80/20 Balancer).
  • Since it’s adding single sided liquidity, a portion of those ETH would essentially be used to buyback LPT.
  • Should the Os & delegators decide that we have enough liquidity in a few years, we could always switch to a buyback and burn model (the ETH is used to buy LPT, which is then burned).

So Os will still get payed the same amount for winning tickets, but in LPT instead of ETH. The ETH is instead used to create protocol owned liquidity - which makes LPT independent from CEXs (and therefore in a way also protects against regulatory changes). And more of the inflationary LPT will go to those who actually perform work, idle Os that just do the reward calls will receive less LPT.

Looking at the current daily inflation, LPT price and fees paid, a 1-2% cut of the daily inflation is needed to have enough LPT for fee payments. As the workload increases, this percentage also needs to be increased - meaning LPT becomes more scare, the more the network is used.

Note: I’m just writing down my thoughts here, it’s by no means fleshed out. So feel free to comment on it or post your own idea :slight_smile:


Just to clarify, are you suggesting an additional 1-2% of daily inflationary rewards would be taken away from O’s, just to be given back to those lucky enough to win tickets?