THL Emissions Cut for Sustainable Tokenomics

TL;DR: Starting March 13th, THL Emissions will be reduced by 50% across all pools for the upcoming weekly epoch and all subsequent epochs.

Why Are We Doing This?

THL emissions serve as the backbone of the Thala Protocol, fueling yield boosts for liquidity providers (LPs) and helping us bootstrap one of the largest DEXes on Aptos by TVL. Although emissions are essential for liquidity pools, our goal is to reduce THL token emissions by half for the long-term health of the protocol.

For LPs — with the increase in THL prices, the real yields for Liquidity Providers (LPs) do not change significantly, and they still earn sizable THL emissions for providing liquidity.

What Does This Imply for Thala’s Future?

Reducing THL emissions significantly decreases inflation and potentially reducing the growth in circulating supply. For instance, we are currently emitting approximately $10 million worth of THL annually, and this reduction will decrease emissions to $5 million worth of THL annually — a change from about $196k weekly to $98k. This also frees up a substantial amount of unallocated THL for various development purposes. Furthermore, the community can now direct the use of the currently unallocated THL through the governance process for other purposes.

We believe this could eventually create an interesting feedback loop, attracting long-term liquidity and rewarding those most aligned with the protocol’s long-term success. Ultimately, the protocol’s medium-term goal is to reduce THL inflation to zero and rely solely on actively generating yield to attract liquidity and capital. Simultaneously, we are exploring frontiers such as sthAPT Restaking, MEV capture, institutional staking, real-world assets (RWAs), and more — stay tuned as we build this together with the Thala community.

About Thala:

Thala is a decentralized finance protocol powered by the Move language, enabling seamless borrowing of a decentralized, over-collateralized stablecoin, Move Dollar, and capital-efficient liquidity provisioning via a rebalancing AMM on the Aptos blockchain.

Website: http://thala.fi/

Foundry: https://thalalabs.typeform.com/foundry

Discord: https://discord.gg/thala

Twitter: http://twitter.com/thalalabs

Documentation: https://docs.thala.fi

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