Compounder Re-structure, Burned Keys and More

Key Points

- We have had amazing growth since the launch of Compounder, congratulations everyone.
- On December 10, we will be making a large improvement to the protocol.
- Total supply will be burned by 80% from 1,000,000 CP3R to 200,000 CP3R.
- Emissions will be halved on December 10, and by 50% every epoch (30 days).
- Token contract admin key will be burned, permanent removal of mint function and control
- Dev fund adjusted from 20% to 7%: 93K for circulation over 12 months, 14K for team
- Emissions will stop forever in 12 months; Compounder will be decentralized and deflationary.

Taking a look back over the last two weeks

Compounder had launched on the 10th of November, and it has been a rollercoaster to say the least. Looking over here are some of our metrics as of this post:

Top Price: ~$98 USD
Top Liquidity: ~$790,000 USD
Top Assets Under Management: ~$10,000,000 USD
Staked/Circulating/Max: 35,000/32,000/1,000,000 CP3R
Tokens Holders: 738

We learned that since launch, there had been confusion due to the total supply outlined in our Etherscan. The 93,000 CP3R shown below is what has been minted for our current 9 pools over a 30 day period. Please see click here to read about our current emission rates. Compounder currently has a maximum supply/hard cap of 1,000,000 CP3R.

Let's talk about the protocol improvements

On December 10, we will be making a large improvement to the protocol. This date is chosen as it will be 30 days after the launch of our first generation of pools, we called these '30 day' periods an epoch. We had first decided to be dynamic in execution by adjusting pools every epoch, however in this current environment - we have implemented a re-structure which will instil trust, prove highly sustainable and encourage growth to the protocol - here are the improvements.

1. Total supply will be burned by 80%

The total supply of CP3R will be reduce by 80% from 1,000,000 CP3R to 200,000 CP3R. We prioritise the necessity to dampen inflation of CP3R while still earning interest on your deposit - in turn, we will need to reduce the total supply and introduce an emissions schedule which includes an emission reduction model described below. When this announcement is made, these transactions will start baked in the 24 hour time-lock to be deployed:

- Mint final 107,000K CP3R - the current total supply is 93K (so, 200K - 93K = 107K)
- Burn 800,000 (80%) CP3R of maximum supply - by burning admin key

Security note: When 107K CP3R tokens are minted, they will go directly into the treasury wallet, which will require another 24-hour time-lock to move, as to be vulnerable for selling. All functions are visible in the time-lock and funds are safe.

2. Emissions will halve every month for 12 months

The emissions per epoch will be adjusted permanently. Currently there is 93,000 CP3R per 30 days. The emissions for the second epoch will be reduced by 50% on December 10, and by a further 50% every epoch (30 days) until there is 0 CP3R left to supply. These following two weeks will be your last chance to earn the highest emission rates for CP3R that will ever be available, and acts as an opportunity for you to start accumulating and earning. This is the formula for emissions:

Emission Rate Calculation (Xn)

This formula below is used to work out the emissions per month

1. X number of CP3R will be emitted per month in total
2. X amount is distributed across all pools that are active at the time
3. X can be calculate by the following formula:

where,
Xn = Emission rate of the Nth month
A = Starting emission rate
R = Reduction factor

In the case of CP3R, A will be 46,500 and R will be 0.5 (50% reduction per 30 days)

Given our reduction factor of 0.5 and starting emission rate of 46.5K, the total number of CP3R emitted will be 93K over the span of 12 month. Adding together with our 1st month bonus emission, our total supply will sit at 200K. This is worked out using the formulas below.

Max Supply Calculation

The total amount of CP3R that will ever be emitted can be represented as:

and can be calculated using the formula of:

3. Token contract admin key will be burned

After the event of burning the tokens and setting the emission schedule, there will be no use for the token contract admin key - this will permanently remove any chance of utilising infinite mint function in the future. After this, there will never be anymore CP3R minted - for real - we hope this will further our trust with the community. We can still add new pools, adjust allocation of emissions through governance as we move forward.

4. Dev fund adjusted

The dev fund had originally been set to 20%, however we will be reducing this to 7% for goodwill and allowing more emissions for our users. After burning, there will be 200,000 CP3R left - the allocation will therefore be 186K CP3R for circulation, 14K for dev fund. Since launch the team have not received any tokens from the dev fee, upon our final mint, we will initially store it in the treasury. We will run a snapshot proposal to decide where we should lock the dev funds for the duration of 12 months minimum.

What do you want to be when you grow up?

The long term plan for Compounder can go in many directions. Some of the goals we would like to achieve is to continue developing the strategy pools from the set emissions, maximise the UI/UX efficiency, greater strategic partnerships and innovate the yield aggregation as far as possible. Alongside increasing TVL, CP3R price and a happy community.

In terms of our model - by 12 months we plan to arrange an authoritative multi-sig council and decentralize Compounder. Finally, since we will not mint anymore tokens after the final epoch - we will not be inflationary anymore, where CP3R holders will earn lifetime earnings from the protocol withdraw and performance fees.

Thanks for going this, if you're reading this as it comes out then you are officially an early adopter of Compounder. Welcome aboard and let's see what we can build together. We hope you enjoy the protocol update, please join our socials to discuss everything further with the community and team.

Website: https://compounder.finance
Twitter: https://twitter.com/gocompounder
Telegram: https://t.me/gocompounder
Discord: https://discord.gg/CJssguRyxE
Blog: https://app.sigle.io/compounder.id.blockstack/
Github: https://github.com/CP3R-Finance/cp3r-contracts