Tokenomics, Revenue & Fee Structure

Introduction

Jones DAO has developed a cutting-edge composable DeFi asset that abstracts away complexity and maximizes yield while minimizing overall risk. Our strategists deploy advanced strategies to drive the highest possible value to members of the Jones DAO community. Our tokenomics will incorporate some of the best governance structures available in DeFi today to fully align the incentives of all stakeholders. This article will explore our tokenomics, how Jones DAO generates revenue, and where fees are applied.

Tokenomics Overview

The JONES token is designed for a variety of use cases - governance, fee accrual, and liquidity incentives.

Governance

JONES tokens will be a crucial part of protocol governance and can be used to vote on important decisions including the introduction of new vaults and strategies, new yield protocol integrations, protocol parameters, and the distribution of rewards. In the future, we will also use governance to host elections of new strategists. The scope of governance could expand in the future depending on community involvement and feedback, so be sure to participate in policy discussions.

veJONES

Voting-escrow JONES (veJONES), is based on the powerful lock and boost governance models implemented by Curve Finance, Badger, and Ribbon Finance. veJONES is an extraordinarily powerful tool within the protocol.

Users who lock their JONES into veJONES will be able to vote on gauge weights for jAsset LP staking rewards. Gauge weights essentially determine how JONES emissions are distributed across different jAsset/Asset pools. This is important because it allows the protocol to be extremely efficient in terms of JONES distribution.

For example, users who are long-term holders of JONES with large ETH vaults positions can vote for a higher proportion of JONES rewards to be directed to jETH-ETH staking pools. This voting mechanism ensures that JONES tokens are not directed at unused pools and eliminates waste. Users who purchase and lock JONES into veJONES will also be entitled to a portion of protocol fees and additional JONES incentives.

veJONES Boost

Users that have locked veJONES are also entitled to a rewards Boost. This boost is designed to be beneficial for positions of all sizes, not just whale wallets. The APR of emissions that a user is entitled to scales with their JONES Boost:

A (value of veJONES locked) +  B (value of jAsset LP) + C (value of JONES LP)

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                                     D (value of jones vault deposits)

The greater the ratio, the more JONES emissions a user's vault positions receive. As it is a ratio and not absolute value of funds, both large and small users can benefit. The weight parameters A, B, C, and D are determined by the DAO and will be reviewed periodically by governance. Use this simple JONES Boost calculator to experiment with different values and weights (duplicate or download the Google Sheet for your own use).

Token Emissions & Deep Liquidity

The emission of JONES will be directed at jAsset/Asset liquidity pools to enable safer lending and arbitrage opportunities based on live PnL. Deep liquidity enables more profitable arbitrage scenarios, which incentivise a constant peg for jAssets with respect to the current vault PnL. As we stated above, we will eventually move to a system that uses community controlled gauges to enable a more efficient distribution of emissions - users ‘vote’ for the assets they use. Soon enough, Jones DAO will put up a proposal to reward community strategists with assets they create as well as a portion of the revenues generated by their strategies.

Jones DAO Fee Structure

The protocol earns fees on total TVL, and on Jones Vaults' performance. Currently, the fees are:

• 2% annual fee on total TVL, applied at each epoch
• 20% performance fee on yield generated

This structure, typically referred to as “2 & 20” is very standard in both DeFi and TradFi markets. This structure allows Jones DAO to earn a base-line level of compensation while also being highly incentivized to produce alpha for our users.

Summary
Our tokenomics and rewards structures are the culmination of the best available in DeFi. Gauge weights and veJONES locking are currently in development. More details and timelines will be released as they become available. For now, be sure to get involved in our Discord and take the time to try out our initial jAsset vaults.

Join the Jones DAO community now to stay up to date on our upcoming releases and partnership announcements. We’ll be hosting AMAs, previews, and sharing plenty of alpha:

Discord

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Documentation