Maple Finance is considering using protocol revenues to buy back native SYRUP tokens and distribute them as rewards to stakers, the decentralized finance (DeFi) protocol said in a Jan. 13 governance proposal.
The proposal, which awaits a tokenholder vote, would allocate 20% of Maple’s protocol revenues for monthly buybacks as an added incentive for stakers. Voting starts on Jan. 20, Maple said.
Buybacks would be sourced from decentralized exchanges (DEXs) and over-the-counter (OTC) trading desks. Maple has been earning around $5 million in annualized revenues from its onchain lending service as of Jan. 13, according to the proposal.
“By distributing repurchased tokens to SYRUP stakers, the DAO [decentralized autonomous organization] rewards those committed to the long-term health and growth of the Maple ecosystem,” Maple said in the proposal.
Additionally, “[a]ligning the incentives of SYRUP stakers with protocol performance through rewards ties their interests to the protocol’s success.”
Maple is an onchain lending protocol. Source: Maple
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The buybacks will complement existing staker incentives from inflationary SYRUP emissions, Maple said. Per the proposal, stakers will receive 20% of new SYRUP emissions, or around 1% of SYRUP’s total supply annually.
“Based on the current balance of staked SYRUP, the pro-forma rewards rate [from token emissions] for stSYRUP would be ~5.0% APY,” Maple said.
The remaining 80% of annual SYRUP emissions — or 4% of total supply annually — will stay in the protocol’s treasury, it said.
The SYRUP token is currently trading at a roughly $88-million market capitalization, according to CoinGecko.
SYRUP is down roughly 60% since launching in November. Source: CoinGecko
Value-accrual in DeFi tokens
DeFi protocols are under increasing pressure to provide tokenholders with a share of protocol revenues, with projects such as Aave, Ethena and Ether.fi piloting value-accrual mechanisms for their native tokens.
This is partly because pro-crypto President-elect Donald Trump’s Nov. 5 US election win signaled the outset of a friendlier regulatory environment for DeFi protocols, asset manager Grayscale said in December.
On Nov. 15, Ethena, a yield-bearing stablecoin issuer, agreed to share a portion of its roughly $200 million in protocol revenues with tokenholders.
In December, liquid restaking token (LRT) issuer Ether.fi proposed allocating 5% of protocol revenues to buy back native ETHFI tokens and distribute them to stakers.
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