Introducing $SHARPE Token: Motivation, Mechanism, and Incentive Design
Sharpe Labs is a DeFi R&D lab that focuses on developing unique novel financial intelligence solutions using institutional-grade asset management tooling and infrastructure. Sharpe Labs is built around the Sharpe Protocol’s governance token, the $SHARPE Token. This blog will go over the Sharpe token, its incentive design, and the protocol’s governance mechanism.
The Sharpe Token, or $SHARPE, is the Sharpe Protocol’s governance token. The system is governed by the Sharpe DAO, which is made up of Sharpe token holders and delegators. The governance system employs a weighted voting mechanism in which an individual’s voting power is determined by the number of $SHARPE tokens owned. Sharpe Labs’ initial token is non-transferable, but this will be changed through a governance proposal.
Sharpe Token holders have the ability to vote on protocol changes such as deploying Sharpe core smart contract deployments across multiple networks and protocols, deploying dApps built on the Sharpe SDK across multiple networks and protocols, decentralizing front-end hosting, and managing the DAO Treasury.
Sharpe Token’s Incentive Design
The Sharpe Token serves as a reward for participating in the Sharpe ecosystem, bringing incentives such as fee sharing, revenue sharing, referral bonuses, and rewards for dApps built on the Sharpe Protocol. Token holders can vote on important Sharpe Protocol development and management decisions, such as product design and function, new product launches, and advanced product additions.
The token enables the accrual of fees generated by the Sharpe Protocol and is an essential component of the guild program that allows developers to build on top of the Sharpe Protocol. The total supply of $SHARPE tokens is 100,000,000, with no additional tokens to be created in the future.
Sharpe Token’s Emission Design
Sharpe Token’s emission is organized into ages, each lasting about six months, unlike most DeFi protocols that schedule emissions and hardcode their reward system years in preparation. Each age establishes new guidelines for reward emissions based on the protocol’s requirements. The Sharpe token’s aim is to incentivize long-term users rather than short-term mercenary capital. Sharpe Token is intended to incentivize participation in the Sharpe ecosystem while also providing a means of protocol governance.
Sharpe tokens are initially semi-transferable, which means they cannot be transferred until they are unlocked via a governance call. Sharpe Labs can use this design to guarantee that token distribution is fair and that the community is involved in protocol governance. Once the governance proposal is passed, the Sharpe token will become fully transferable.
The governance mechanism of the Sharpe Token is aimed at ensuring that token holders have a voice in the development and management of the Sharpe Protocol. This mechanism design ensures that the protocol’s development aligns with the community’s vision.
The Benefits of Sharpe Token’s Incentive Design
Sharpe Token’s incentive design creates a system of rewards for users that supports the growth and development of the Sharpe Protocol. This design benefits the Sharpe ecosystem in several ways:
Encouraging Long-Term Users
Sharpe Token’s emission design incentivizes long-term users to participate in the Sharpe ecosystem. This approach is in contrast to many other DeFi protocols that focus on short-term incentives. By encouraging long-term users, Sharpe Labs ensures that the Sharpe Protocol has a strong foundation and support from a dedicated user base.
Supporting Sharpe Labs Products
Sharpe Token’s incentive design unifies all Sharpe Labs products, creating a cohesive ecosystem that supports the growth and development of each product. By incentivizing users to participate in the Sharpe ecosystem, Sharpe Labs can ensure that each product receives the support it needs to thrive and succeed.