Improving Pangolin's Tokenomics

I’d like to suggest some improvements to Pangolin’s current tokenomics.

Two topics I would like to cover are 1) emissions and 2) deflation. Strong PNG tokenomics is essential to the success and health of the Pangolin project, since PNG rewards are the primary way we can incentivize liquidity into the DEX.

Topic 1: Emissions

Current state of emissions:
The current emissions schedule of PNG is to emit 175k PNG per day for 4 years with a halving every 4 years. So in 4 years the emissions rate will be halved to 87k PNG per day, and then again in another 4 years, etc. Source: Platform and PNG Token Litepaper - Pangolin

There are a few issues with the current emissions schedule centered around 4 year halving:

  1. The token remains inflationary until there is a halving, which is 4 years away
  2. The halving is an abrupt and jolting event

Screen Shot 2021-07-29 at 8.35.47 PM

Suggested improvement of emissions:
I suggest we move to an emissions schedule that gradually reduces each month to meet the target levels that were originally set. So after 4 years, we would still reach the same target of reducing emissions by half, but we would do it gradually over time instead of all at once.

Benefits of a gradual reduction schedule:

  1. Helps the token become less inflationary
  2. Eases users into less emissions instead of changing it in one abrupt event
  3. we can route excess emissions to the community treasury to ensure that the treasury stays consistently funded.

Screen Shot 2021-07-28 at 10.46.47 PM

Topic 2: Deflationary measures
Currently, there are no deflationary measures in place for the PNG token. New tokens are minted each day and added to the circulating supply.

Suggested improvement:
I suggest adding a buy-back and burn program to PNG’s tokenomics. We would fund the buy-back and burn by turning on the swap fee switch that re-routes 1/6 of swap fees revenue. At current trading volumes, this would allow us to buy-back and burn ~$100k USD of PNG per month. We would buy back PNG from both the market and swap tokens for PNG with the treasury to help diversification. 100% of the PNG bought back and swapped will be burned. This buy-back and burn event would occur twice per month. As volume and revenue increases, we can buy back and burn an even larger amount each month. We’ll need to do a deeper dive on the exact tokens and amounts we will be swapping with market vs treasury during the implementation of this.

Benefits of buy-back and burn:

  1. Removes PNG from circulation
  2. Adds PNG buy-pressure to the market
  3. Helps treasury diversification
  4. Increases demand and reduces supply

We should improve Pangolin’s tokenomics through 1) a gradually decreasing emissions schedule and 2) a buy-back and burn program. Improved tokenomics will help ensure Pangolin’s long-term success as a premier DEX.

Please post any feedback or questions below.


This makes so much sense. I am definitely supporting the idea.


Looks like you’ve changed the stepwise emission function to piecewise-linear, which means at time “t” under the new scheme the total number of coins emitted by the new scheme will be significantly less than the old scheme. Might that overall lower emission rate pose problems given the expectations set by the current function? I guess worst case is you lose some liquidity?


Its a valid concern that there will be less emissions than expected. The attraction of emissions for liquidity providers is the APR (valued in terms of USD) and not the actual number of tokens received, so farming 100 PNG per at $1 vs farming 50 PNG at $2 shouldn’t make a difference to most liquidity providers, as long as they are getting sustainable APRs, which is what the changes above are trying to accomplish.


I totally agree with the idea, I hope it will be useful in every aspect already written above.
Buy back programs are always giving trust to the investors and halving once in a 4 year is an old fashioned method, the proposed option is much better imo…

Thanks :+1:t3:

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Definitely on board with smoother emission reduction. Saves charts reacting too sharply.

Deflationary mechanics are great too; They are applauded by the BSC defi community, Pancake fans and so on.

On PNG, introducing more utility beyond governance would spur on investors and liquidity providers. Think locked staking, single sided staking, launch pads, merchandise.

The demise of rewards is unavoidable. But there are routes around this.

For example instead of burning fees, reattribute them to the farm pool. And build in more ‘sinks’ to keep the pool topped up. Adding to the release schedules emissions.

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Wouldn’t it make more sense to burn the excess emissions? It seems like this would make some spectacular announcement and therefore help with keeping the community happy. Particularly early LPs who now tend to have many, many more PNG than most hoped for. Burning the excess emissions would make this a more scarce resource rather quickly.

Regarding the funding of the community treasury:

why not use these for the treasury instead?

TL;DR: Burn excess emissions, fund the treasury with the swap fees switch.


For maximum deflationary pressure, we would want to buy-back and burn tokens that are already in circulation, so we would have to fund this with the swap fees. Without the swap fees, we don’t have any way to buy-back tokens from the market.

We could burn the emissions, but that doesn’t take any existing PNG out of circulation. So sending excess emissions to the treasury is just as effective in keeping the emissions uncirculated because those treasury funds are untouchable unless the community votes to do something with them. Sending emissions to treasuries is a common practice, SushiSwap does this too with 10% of their emissions.

I like the concept but the burning has to be more aggressive. 100K USD a month is nothing… You know who earns (and dumps) 300K USD worth of PNG a month (even now after we finally cut off his rewards to 1/10)… Look at Pancake Swap go aggressive like them… also go aggressive on the PNG/AVAX pool to 50x and other PNG pools to 10X… do a HUGE burning launch event with retroactive burning to compensate for the emmisions of the past 6 months. Do it guys be aggressive, make PNG great! Put it in the Top 100 by marketcap at least


It’s a tricky balance for sure. Something that requires out of the box thinking.

The incentivization model. Pangolin incentivizes liquidity by rewarding PNG. PNG rewards inflate the supply. This increase debases the currency. PNG falls in price, relative to marketcap.

Incentivise. And reward more than PNG. Put PNG to work. Incetivise through other means, other tokens.
As mentioned in my previous post, some examples of how to incentivise through value propositions;

  • single-sided staking (for other tokens),
  • launchpads (incentivise TVL, and reward more tokens),
  • commerce (sell stuff; NFTs, merch, subscriptions, services).

This generates demand. It creates value. Offer more than simply governance.

Rebasing the currency through buy backs and burning. This, rightly said, decreases the supply. But this does not increase demand. At least not “real” demand. A buy back to burn is (in my opinion) not demand. It’s rebasing. It’s monetary policy that manipulates the price to look favourable. It only creates the illusion of demand.

Feels more of a value creation problem. Sure, controlling the PNG supply is important. But, by creating value we’re not just toying around with the same market-cap, the same volume, the same liquidity, the same TVL. Instead, generate demand through growth, improvement, acquisitions, content, marketing, support.

Removing PNG from circulation and forcing buy pressure. This makes governance harder to attain. Not sure what the amount needed for governance is, but I have a feeling its pretty high. There’s a conflict of interest between artificially making the price look better and making sure Pangolin doesn’t turn into a boys club at the top where only megalodon whales can propose changes.

Don’t remove coins from supply unless to rectify abuse of the system, or hacks? Allow pangolin to grow more democratic over time through the growing supply. It’s a governance token after all.


I think there are two separate decisions within this proposal that should be separated. The altering of the emissions/distribution makes a lot of sense to me. I can see wanting to do reductions more frequently, as well (not necessarily halvings). However, once you do them near continuously you get a smooth emissions as well.

However, as stated, this change doesn’t change the overall monetary supply over time. This is more of a psychological changes to better convey the altering monetary policy over a shorter period of time to demonstrate the scarcity and reflect the value of participating early. Basically, the horizon seems to long and PNG is potentially being devalued due to it.

Please let me know if the above is an accurate assessment…

In regards to the benefits of the reduction, I wouldn’t say less inflationary actually makes things better if the long term emissions are similar mathematically, but I can see it from a marketing/psychological perspective.

Would love clarity on why abrupt matters… it doesn’t seem to be an issue of abruptness based on the market, but the time to the next phase being a distance.

Personally, not a fan of routing excess emissions to the treasury. I love the treasury, but I feel there are more beneficial ways to capture funds for the treasury than cutting emissions to LP and just redirecting…

(First Pass thoughts)


Anything is a bandaid when we have this high emission. The only solution is significant reduction of emissions and total supply. The rewards done their job of bringing liquidity. Now the only thing we need to do is to offer the best user experience. For example keeping the fees as low as possible is one of the ways to achieve this. If we can afford to reroute 1/6 of the fees, we might instead just reduce the fees 1/6.

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  1. I am in favour of buybacks obviously. But I think using the fees is not the best approach. I think it makes much more sense to to build up a diverse treasury and invest them in different protocols like benqi and only use the generated yield to buy back the token, only spend your interest or ngmi. which takes me to my second point.

  2. I think after buying back the token burning them is a rather big mistake. Would much rather follow a buyback and make it philosophy Stop Burning Tokens – Buyback and Make Instead — Placeholder


I’m not sure if I understand you correctly here, but it really would change the monetary supply over time, wouldn’t it? Hence the question what to do with the “excess emissions”. If voted in now, the striped regions below would go into the treasury (or get burned).

I guess when shown like that, it becomes clear that this is actually a very major decision …


Just FYI, the fees are hardcoded into the UniSwap v2 contract as 0.3%, total with the option of routing 0.05%. So it would be a heavier technical lift (plus maybe an audit) to change the original contracts.

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Agree with adding value and utility, which will be addressed with other initiatives in our roadmap. I think we can do both 1) Give PNG more inherent utility and use-cases 2) ensure that our emissions model makes sense. The current emissions model was launched without seeing the impacts, and seems to be modeled after Bitcoin. Now that Pangolin and PNG have been live for 5 months, we have historic trends to look at in order to make optimizations to the emissions model. Top DEXs and DeFi projects are constantly fine-tuning their emissions models (see: SushiSwap, PancakeSwap) in order to best optimize their apps and we should follow this best practice as well.

On the topic of buy-back and burn, it is a bit more controversial. However we think the rate that we are burning (100k per month projected) isn’t an overall threat to governance since there are already ~40M PNG in circulation and growing. If this starts to become an issue, we can pivot into a better solution. The economical perception of burning and deflationary measures are very attractive to new and existing investors (see: BNB, Cake), and we want PNG to have these same attractive properties as well.


I like the idea very much. I have always been a strong sustainer of activating the 0.05% fee for providing buy-back and burning. The change in the emission I understand that can’t be changed completely and that’s way the excess would go the treasury, isn’t it?

Yes you are correct, the daily emissions is hard-coded, so to reduce emissions we would route excess emissions elsewhere (like to the treasury as suggested above)

Ok, so I understood correctly then. One thing that’s not too clear to me is when you say that for the buy-back some you will buy from the market and some you will swap from the treasury…I am not really sure how that would work…I mean wouldn’t mean that you would exchange the PNG in the reality for USD to keep some USD in the treasury? Wouldn’t that reduce the positive effect on price of the buy back and burn if we buy from the treasury?

Yes so the suggestion is to use some of the swap-fee to help diversify the treasury. Currently the treasury is 100% PNG, and it is risky to have the projects funds all in one asset. You’re right that it would reduce the impact of buying from the market, but treasury diversification is a higher priority to the health of the project.

So lets say the revenue for two weeks is $50k, and we decide to go with a 50/50 split between market buying and swapping with the treasury. We would buy $25k of PNG from the market, we would swap $25k of non-PNG tokens for PNG from the treasury, and then we would burn the $50k of PNG that we swapped for.