Implement Vesting of FNX Mining Rewards Immediately

By far the most important action we can take in regards to the FinNexus Protocol for Options (FPO) is to adopt a reasonable policy towards vesting FNX mining rewards.

In the past few months, we have observed the following:

  1. High APY liquidity mining rewards attracts deep liquidity to the pools that we direct the rewards to, at least in the short term. However, these liquidity providers (LPs) do not seem to be interested in long-term health of the protocol and are only there to farm-and-dump the rewards.

  2. Low APY liquidity mining rewards do not attract deep enough liquidity pools, neither to our Uniswap FNX/ETH pool nor our FPO liquidity pools.

The solution:

Raise APYs!

But with one caveat. All mining rewards are locked up for a reasonable time after being earned.

In project after project, most notably HEGIC and CVP, we have seen that the implementation of vesting or an escrow service has provided downside protection for token price. When Hegic changed the token for mining rewards for contributors to their options pools from HEGIC to rHEGIC, an inert token that is only convertible to HEGIC after certain protocol goals have been met, the HEGIC token price almost immediately increased by 40% in the following days. After reaching a low of $1.35 or so earlier this month, Powerpool implemented linear vesting of mining rewards via smart contract for all of its reward pools and within weeks saw almost a doubling of its CVP token price.

Even the OG liquidity mining project, Synthetix, requires 1 year vesting of all of its liquidity mined SNX, with the caveat that the mined tokens can always be used as backing for the minting of sUSD even while the SNX remains locked up. In DeFi project after DeFi project, we have seen that vesting is the correct choice for building a long-term-oriented community and attracting more permanent capital.

Therefore, we need to implement vesting for FNX mining rewards immediately!


Implement a 6-month lockup for all mined FNX for both FPO and Uniswap. To compensate for the loss of immediate liquidity, we will adopt a targeted mining APY rate of 75% for the options pools and 50% for the Uniswap pool. As the liquidity pools grow larger, the community reserves will be accessed to ensure that the FNX mining rate, currently at 9,666 FNX per day across all 4 liquidity pools, will be adjusted weekly to be reset to the above target rates of 75% and 50% respectively.

Discussion points:

I believe, first of all, that we should have a snapshot vote to determine whether or not we SHOULD prioritize the development of a vesting mechanism. Once we are agreed on that, we could have a snapshot vote of protocol token holders to determine what the consensus is on the following topics:

  1. Length of vesting time: I actually think 6 months could be adjusted longer, at least in the FPO pools, IF we allow the earned FNX to be locked to the mining address but also serve as collateral in the options pool, thus allowing users to compound their FNX. Although this does present some difficulty at the smart contract level, i.e. How do you liquidate locked reward tokens should that be necessary? I think we should research some methods for facilitating this to make it happen.

  2. APY rewards rate: In fact, considering that HEGIC provides a nice hefty 300% APY for providing liquidity to their options pools, we ought to consider raising our liquidity mining APY rewards further. After all, if we implement vesting, farmers cannot farm-and-dump. Moreover, most farmers only look to headline APY to make their ape-in decision. So, although I believe the target rates in my proposal are very reasonable, we should definitely consider raising them if we observe that those rates are not high enough to attract deep enough liquidity in the pools.

Thank you for your time and I hope we can have some meaningful debate here about the future of our protocol!


Prof K


I fully agree. As mentioned by you Hegic and Synthetix are successful with vesting and (1) prevent constant dumping and (2) foster a stronger sense of community and believe into the long-term success of a project. We see much more community engagement for Hegic for example than for Finnexus, there are several reasons for this but high APYs and mid-term vesting are definitely an important factor.

6-12months seems reasonable but I would immediately increase the target APY to be above 100%. Not only for the reasons mentioned in the initial post but also for better “exposure” across different DeFi tracking services. Many people just look for the highest APY they can get and FinNexus should be one target for them. Also we are in 1:1 competition with Hegic.


Personally I agree on the vesting of mining.
What Boris said in the other post mentioned locking for 6 months (I think he meant mining incentives locked until the last day after 6 months, and then releasing in another 6 months).
I also agree the vesting mining reward APY should be much higher than now.
But I think to strictly set the mining APY to a certain level and adjusted weekly is not the best plan. Vesting FNX finally goes to the market, right? This could make the FNX inflation unpredictable.
We can make the total daily mining amount constant and make adjustment monthly.

Just a thought about lockup period for FNX mining: will it not just only differ the farm and dump problem?
If the daily rewarded FNX are locked for 6 month, the dump will stop during this 6 month period but will resume as soon as the 6 month period ends. It only pushes the problem at a later date, don’t you think? Or am I missing something on the vesting mechanism?

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Your concern is a reasonable one and I was considering about the same before.
Yet in the current DeFi market, it is useful and working to attract liquidity from the market at early stages.
We need to some incentives to start the engine. Now not many know FinNexus, and we need a package plan for publicity.
Circulating supply will increase after 6 month, but if we make the platform known to more and have the demand increase more, the problem will be solved nice-and-easy.

And how about adding Prof’s ideas, after the period of 6 months to 1 year, it was possible to do an even higher staking in APY in partnership with CEX, I mention the example of Sologenic with Coinfield who has a stack without withdrawal for 24 months.

FinNexus could try Bitrue for that. The rewards retained by Unisawp or FPO and reapplied in these CEX stak could be very advantageous to the point that the investor does not want to immediately sell all of his reward.

In addition, it would create a more advantageous market in terms of investment for medium and small FNX investors. Whoever has a small percentage in the FPO or Unisawp, will prefer to do stacking without withdrawal for 1 year if they win 300%. It will not abandon the project and go after market trends.

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As Jonathan said, in the future we will have a little problem, but we will have time and visibility to make the platform better known, instead of burning the tokens, use them to list in the top 10. @Coinbase listed each project that still did not deserve, Binance too. In the future make a repurchase and burn them. Like BNB.

I don’t think a repurchase and burn is necessarily what we want to do. But I do think we should have a feature where users voluntarily burn their FNX and receive some kind of reward or boost. But the key is whatever we burn has to be from circulating supply.

It is possible to implement a code in the token for a burn at each transaction. With each purchase and sale at CEX, will it burn a little? As xrp does, perhaps more aggressively than xrp.

Doesn’t work with Balancer and other Ethereum protocols if you do that. That’s why I advocate a “tokenholder-activated burn mechanism.” It’s also better from a regulatory perspective.

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Could be a problem when trading on Dexes. Deflating when making transactions caused some problems before.

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I definetly support the vesting of FNX. There are plenty of other examples in crypto where this has worked well. I would definitely argue that the APY needs to be higher though. The current APY of 25% for FNX pool isn’t that great due to the high gas prices. In its current state you need to deposit huge amounts of FNX to offset the gas prices to earn enough rewards to make it worth while

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It is a must!! Do it now