This proposal seeks to expand LOAN token incentives across all active lending markets within the LOAN Protocol on Metal X Lending. By doing so, we aim to drive liquidity, increase market participation, and ensure balanced incentive structures across the entire protocol.

Background

Currently, LOAN rewards are distributed selectively, with a focus on a few major markets such as XBTC, XETH, and XUSDC. While these incentives have successfully driven activity in those markets, other supported assets remain underutilized due in part to a lack of competitive rewards.

Metal X Lending now supports a wide range of assets, including Bitcoin, Ethereum, stablecoins, XPR, and altcoins like Dogecoin, Litecoin, and XRP. To maintain momentum and encourage broader adoption, the rewards program should be extended to cover all supported markets.

Proposed Reward Allocation

We propose the adoption of a standardized reward formula across every market on the LOAN Protocol:

• Supplier Rewards: 12,675 LOAN per half-second
  

• Borrower Rewards: 19,013 LOAN per half-second
  

• Total Emissions per Market: 31,688 LOAN per half-second
  
  

This 40/60 supplier-to-borrower ratio has proven effective in current active markets and provides a balanced incentive structure that supports both liquidity provision and borrowing demand.

Rationale

By applying LOAN rewards to all markets equally:

• We encourage diversified market activity and avoid over-concentration in a few assets.
  

• Lenders across all supported tokens gain consistent yield opportunities.
  

• Borrowers are incentivized to participate even in newer or lower-volume markets.
  

• The overall utility and visibility of the LOAN token is increased through broader usage.
  
  

This uniform approach creates a level playing field for all assets while still allowing for future governance proposals to adjust rewards based on individual market behavior or performance.

Implementation

• If passed, this reward structure will be applied to all supported lending markets in the LOAN Protocol.
  

• Metal X Lending will implement the changes in the next reward cycle.
  

• Protocol performance will continue to be monitored, and adjustments may be proposed via governance as needed.
  
  

Conclusion

Expanding LOAN rewards to all markets aligns with our mission to make Metal X Lending the most accessible and efficient multi-asset lending platform in DeFi. By incentivizing every supported market, we increase protocol utility, foster healthy liquidity, and reward active participation across the board.

Vote Now.