Tokenomics - Updated

Upshift uses two tokens to manage its utility and governance:

• $SHIFT — ERC-20 utility token of the protocol
• $stSHIFT — ERC-4626 staking token for the protocol

$SHIFT is distributed to liquidity providers through emissions.

$stSHIFT is used for governance. Any $SHIFT holder can stake their tokens and receive a $stSHIFT

There is a 7-day (TBC) unlock period for $stSHIFT

The initial distribution is as follows:

• Team and Investors are granted $SHIFT at nominal price, it is immediately staked in $stSHIFT at a 1:1 ratio.
• The protocol launches and starts to generate fees (NIM or mgmt fees). At every epoch (1-week or 2-weeks TBC)
  • $SHIFT is minted and issued to LPs per the inflation rate
  • Once the protocol is sufficiently decentralized. Fees are used to buy back $SHIFT tokens and distribute them to the $stSHIFT contract. This makes the $stSHIFT price go up.
  • A share of emisssions are issued to the team to cover operational cost and future listing expenses as $SHIFT
  • stSHIFT holders vote the following epoch’s emissions allocation.

What are the incentives and benefits created:

• $stSHIFT is issued pre-TGE and grows as capital appreciation
• $SHIFT holders have an incentive to stake SHIFT to earn a share of fees
• Partner protocols have an incentive to either:
  • buy and stake $SHIFT to vote to allocate more future emissions to their pools
  • bribe stakers to allocate more future emissions to their pools
• Fairly uncomplicated implementation. We could say that the team fully controls the emissions initially and release the voting later on

Tokenomics

Upshift uses two tokens to manage its utility and governance:

• $SHIFT — ERC-20 utility token of the protocol