Summary

At present, LOAN rewards are issued at a rate of 1.2675 LOAN per half-second. Before renewing the rewards structure for the upcoming year, we would like to gather community input on whether to increase, decrease, or maintain the current issuance rate.

This proposal presents three options for the community to vote on:
1️⃣ Increase rewards by 1.5x
2️⃣ Keep rewards the same
3️⃣ Decrease rewards by 0.5x

Background

The LOAN Protocol rewards structure plays a critical role in incentivizing lending and borrowing activity on Metal X Lending. Over the past year, rewards have helped drive adoption, ensuring healthy liquidity across supported markets.

As we prepare for the next phase of LOAN rewards issuance, we seek governance input to determine whether adjustments are necessary to:
✅ Encourage higher participation and liquidity
✅ Sustain a balanced reward economy
✅ Prevent excessive inflation while maintaining competitive incentives

Proposal Options

1️⃣ Increase LOAN Rewards by 1.5x

• New issuance rate: 1.9013 LOAN per half-second

• Designed to boost lending & borrowing participation with higher incentives

• May lead to increased protocol engagement but requires monitoring for long-term sustainability

2️⃣ Keep LOAN Rewards the Same

• Maintains the current issuance rate of 1.2675 LOAN per half-second

• Ensures stability in rewards without introducing inflationary or deflationary pressures

• Preserves existing incentives for users who have built strategies around the current model

3️⃣ Decrease LOAN Rewards by 0.5x

• New issuance rate: 0.6337 LOAN per half-second

• Slows down LOAN emissions to reduce inflationary effects

• May impact short-term participation but could enhance long-term token stability

Voting & Implementation

• Voting will be conducted on gov.xprnetwork.org through the LOAN Protocol governance dashboard.

• The option with the most votes will determine the LOAN rewards structure for the next issuance cycle.

• Implementation will take place following the successful conclusion of the governance vote.

Conclusion

This vote is crucial for shaping the future of LOAN incentives. We encourage all LOAN stakers and protocol participants to review these options carefully and cast their votes to ensure a balanced and sustainable rewards structure for the upcoming year.

📅 Vote now.