The community of ParaSwap is considering a proposal that will alter how users receive rewards, which come in the form of native token emissions and a redistribution of transaction fees.

ParaSwap Plots Decreased Token Emissions With New Social Escrow Scheme

The ParaSwap DAO governance forum is considering a proposal that would implement a new rewards system called social escrow. Users receive rewards in social escrow when they take acts that are deemed beneficial to the system. This is different from the present arrangement, which rewards token holders with a percentage of the commissions made by the decentralized exchange aggregator and its native token issuances.

Staking the platform’s native PSP coin, trading on the protocol, and introducing new users via referral links are some of these socially advantageous activities. Every one of these acts results in a score for the user.

Mounir Benchemled, the founder of ParaSwap, claims that social escrow encourages more user participation than vote-locked escrow (where token holders lock up their tokens to receive greater voting rights). “Users are encouraged to trade and take part in governance in the social escrow model. According to Benchemled, the more of these activities they carry out, the better their score and the greater their protocol share will be.

There are unbiased metrics for evaluating these behaviors and rewarding users – ParaSwap

ParaSwap Plots Decreased Token Emissions With New Social Escrow Scheme

According to Benchemled, metrics like the volume of users who stake their tokens and the number of referrals a user generates may be measured.

The switch to a social escrow scheme for ParaSwap is a component of a larger tokenomics move. With this, the protocol will be changed from its current model to one with much lower token emissions. The community of ParaSwap users will vote on this modification.

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