# Abra's Tokenomics Revamp

In this document I'd like to share my views on some ideas which could help Abracadabra improve its current tokenomic structure with the intent to look into a more perpetual model where emissions can be recycled back to the protocol for future re-emissions (perpetual use)

# Current structure

SPELL - native ERC-20 token designed for farming emissions on abracadabra, apart from this the token in its native form does not serve any additional purpose apart from it being used as collateral on some deprecated lending protocols.

mSPELL - Staked Spell into a contract which distrubutes out a portion of borrowing fees accrued over a period of time proportial the the share of tokens held in the contract

sSPELL - Staked Spell into a contract which distrubutes SPELL proportionally among the holders in the contract, SPELL is bought on the market with funds from borrowing fees accrued over a period of time.

sSPELL and mSPELL payouts stem from all the combined cauldrons borrowing fees.

# Issues with the current system;

There is no incentive to stake SPELL into sSPELL for long periods of time, when there is a price surge stakers can unstake, sell and relock their profits surpressing token appreciation.

mSPELL holders don't receive great incentives to stake when there are not many options on the market in terms of use cases for MIM apart from topping up caldron and swap on curve for other stables (USDC,USDT,DAI).

As more SPELL is emitted long time holders get diluted, making the token unatractive as token inflation surpasess staking earning into a vicious cycle of TVL farming and dumping.

# Possible suliutions

Abolish both SPELL staking contracts and upgrade them into one single Vesting contract where:

1. in order to obtain rewards, members must lock and vest their spell for a period of time. Optionally we can offer a base rate for staking and a higher base rate when vesting.

2. reward length of staking with "staking points" where stakers receive fees and staking points proportioal to the time (duration) and number of tokens vested, allowing the staker/vester recompound their fees along with the staking point to a maximum of 100% of their staking value if autocompounded.

Create a MIM/SPELL pool (which is something I suggested back in 2021) for the following reasons;

1. it allows users to manually autocompound their MIM earnings into spell (via contract) at a time they deem the price is right

2. it allows for the arbitrage of MIM's price by all borrowers (including the Abra team) to bring the price to the peg

3. it gives MIM additional usecase as actualy liquidity, and hopefully promoting other protocols to use MIM as liquidity on their trading pairs.

# TVL Farmers

We can Adjust TVL farmer's rewards by implementing a vesting contract where farmers have to vest their rewards over a period of time (28 Days) before withdrawal, ealy exit is poissible, however a fee of 50% on the tokens earned is charged on exit. This 50% is alllocated 50/50 to the our treasury and SPELL vesters (not stakers). The intent for this is for farmers not to onstantly surpress SPELL price action, and when they do they have to pay a 50% penalty fee.