Q3 2022 INV Token Mint and Allowance Refresh

INV Token Mint

The INV+ proposal that passed in early February represented a shift in tokenomics, away from a max supply of 100,000 INV tokens to a new model that allows for rapid growth of the protocol while keeping stakers protected from any dilution.

The additional INV minted as a result of that governance vote has since been deployed against xINV rewards, other Frontier rewards, liquidity bribes, and Olympus Pro bonds, however the DAO is nearing the point where this supply of INV requires replenishment. As laid out in the INV+ proposal, the plan is to execute a mint proposal approximately every 90 days. The current Inverse Finance Treasury is due to reach the current max supply of INV tokens between 4th July and 7th July, so it is important that new INV tokens are minted prior to this to ensure continued predictability in xINV rewards as well as smooth operations of the DAO.

The Policy Committee recommends that 50,000 INV tokens be minted to cover the next 90 days of estimated INV staking rewards, Frontier rewards, liquidity bribes and our Olympus Pro bonding program.

Please note that this proposal is not a guarantee of future INV emission rates beyond 90 days. The DAO’s Policy Committee is responsible for adjusting emission rates in the best interests of the DAO, meaning the next INV mint proposal may be required sooner than 90-days from now, or later if the INV emissions are less than predicted.
Please keep an eye on the #general-policy channel on Discord to stay up to date

Inverse Finance Bonding Program with Olympus Pro

The Inverse Finance DAO utilized the Olympus Pro bonding product between February 4th and May 12th 2022, raising over $2.5m in funds for the DAO. The Policy Committee decided to temporarily pause this program on May 12th as a result of the large market drawdown the DeFi industry experienced as a result of the UST and LUNA crash. This defensive policy approach proved successful, with INV’s market price showing incredible resilience compared with the rest of the market.

12-May 19-Jun Difference
INV $ 78.11 $ 77.32 -1.01%
ETH $1,824.00 $1,043.00 -42.82%

The Policy Committee now believes that it is in the interest of the DAO to restart the bond program, with a focus on acquiring DOLA via the sale of INV tokens. This will allow the DAO to make important strides to tackle the ~9.48M DOLA bad debt accrued during the 2 exploits (April 2nd and June 16th), while operating sustainably. It is crucial that decisive action is taken to deal with the DOLA bad debt to protect DOLA’s peg in the near term while also positioning DOLA to become a leading stablecoin for the next bull market. Multiple bond maturities are going to be tested to find out the optimal bond parameters to maximize value to the DAO. In order to execute upon this, an allowance of 12,000 INV is requested to be given to the Policy Committee Multisig.

This proposal will bring the total supply of the Inverse Finance DAO governance token from 140,000 to 190,000.

On-chain actions:

  • Mint 50,000 INV into the Inverse Finance Treasury.
  • Set an allowance of 40,000 INV to the xINV staking contract.
  • Set allowance of 8,000 INV to the Frontier Unitroller.
  • Set allowance of 12,000 INV to the Policy Committee Multisig

It should be noted that allowances equal 60k while mint amount equals 50k - this is as allowances are set slightly higher than the forecast spend, this is to allow for upwards variation to the forecast without needing to do another proposal much sooner than 90 days from now.