Why the changes in BGV distribution rules will bring more perfect decentralized financial products?
Based on the current situation, Baccarat officially issued an announcement to modify the Baccarat rules.
Due to selling pressure and currency concentration in the original distribution mechanism of Baccarat, the relevant liquidity mining rules were adjusted before been launched. In order to better manage the ecological balance of Defi, we decided to release the final version of DeFi rules before its launch. The rules of its trading and pledge sectors remain unchanged, while reducing the speed at which liquidity releases BGV and lengthening the release cycle.
The advantage of this change is that it avoids excessive concentration of BGV, improves the decentralization of BGV coins, increases the cycle of DeFi mining operations, avoids the problem of selling pressure, and enhances the continuity of coins.
This time, we focused on adjusting the distribDecentralizationution rules of BGV coins. As of December 17th, the final distribution rule of BGV coins: 1% of the exchange coin fee will enter the liquidity pool for distribution. At the same time, BGV will be staking mining (LP) according to the liquidity nature, with a fixed maximum daily issue of 277 BGV. It is issued according to the proportion of liquidity currency pools and individuals, and the proportion of the entire network is recorded every half an hour. The final statistics are obtained after weighted distribution.
Let’s make a simple calculation. According to feixiaohao data, the total issuance is set at 60,000 BGV coins (NGK officially promises not to exceed the issuance). The current market circulation number is 10,000 BGV coins, which means that the number of BGV coins that can be used for liquidity mining is less than or equal to 50,000. Then, 50,000 divided by the current daily maximum number of coins 277, approximately equal to 180 (5000/277=180.5). In other words, it takes at least 180 days and six months for liquidity mining to mine all the remaining BGV coins, which naturally increases the cycle of DeFi mining operations. This is the conclusion drawn under the best conditions in all aspects.
Following the above, BGV reduces the number of coins issued daily, which can increase the life of BGV coins, avoid the problem of selling pressure, and is in line with the decentralization principle that NGK has always adhered to. Everyone can think that with the decreasing amount of BGV coins, the difficulty of the collection of BGV coins will naturally increase.
This adjustment of the rules reminded the author of the previous changes in the distribution rules of COMP. At that time, COMP changed the way it allocates COMP to liquidity providers and borrowers by reducing the amount of currency issued. Users only need to earn dividends based on the dollar value of the assets they invest in or borrow from the system.
It is believed that this adjustment will make the Baccarat project more perfect and become one of the projects with the most balanced fairness, efficiency and security among the many projects of decentralized finance. In the future, it is believe that for Baccarat to surpass YFI, COMP and other projects is just around the corner.