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Details on our merger with New Order, fees, emissions, tSYNO, RCT and more.
Our tokenomics are a work in progress and are subject to change prior to Synonym's Mainnet Launch.
Our merger with New Order DAO passed with over 99% support from the community. This merger gives Synonym a massive early advantage in terms of partnerships, runway and integration opportunities. A full breakdown of the merger process and 1:1 conversion from $NEWO to $SYNO can be found in our Transition Details document. For more specifics on the successful merger, refer to the original Commonwealth Proposal.
Synonym V1 will derive fees from the interest rates charged across different asset markets. The borrowing rate isn’t static; rather, it’s dynamic and will fluctuate based on a variety of factors. These include prevailing market conditions, the specific chain and asset in use and the nature of the asset type, whether it’s a standard cryptocurrency, a wrapped asset or a pegged stablecoin. Synonym is focused on keeping yields competitive to attract users on both the borrowing and lending side of the protocol.
The distribution of fees in Synonym V1 is meticulously structured to ensure optimal rewards and incentivize user participation. The base APY, which is a foundational reward for users, accounts for 40% of the fee allocation. 40% of the fees are directed towards money market lenders, given a mandatory 10% deposit lock into vlSYNO, ensuring a deeper alignment with the protocol overall. The remaining 10% is allocated to tSYNO, as previously stated in our merger proposal with New Order DAO.
Our emissions are designed to address the growth needs of Synonym while balancing the unique token distribution needs created by our merger with New Order DAO. Our token design results in no dilution relative to the previous token design of NEWO. The maximum supply of NEWO was 800M tokens - SYNO will also have a max supply of 800M tokens.
During the first 15 months after Synonym's launch, all emissions will be distributed weekly. Emissions will decrease by 8% every two weeks and will start at 4.75M SYNO in Week 1. Token emissions will be allocated to both depositors and borrowers, with a significant bias towards borrowers.
The vlSYNO locking mechanism provides an additional avenue for users to receive SYNO rewards. Users that participate in our money markets have the option to lock at least 10% of the value of their deposit into vlSYNO. This value lock will be completed in the form of 80/20 Balancer LP tokens (SYNO-ETH). After locking their LP tokens, users will have the option to select the length of their lock, up to a maximum of one year. The longer the lock, the larger the multiplier on SYNO emissions the user will receive.
tSYNO (Transition SYNO) are tokens that represent the 1:1 token swap that will occur at mainnet launch (concurrent with SYNO TGE). Users who opt to convert from NEWO will receive 1 tSYNO token for every NEWO token they convert. These tokens will be automatically staked for 15 months (the average amount of time remaining for veNEWO lockers) and will receive fees throughout this period.
tSYNO holders will have the option to unstake into liquid SYNO at any point during the 15 month period. If users opt to unstake their staked SYNO before the completion of the 15 month period, the unstaked amount of tokens will be subject to an unstaking penalty. This penalty starts at 90% and declines to 0% linearly over the 15 month period. This unstaking penalty is put in place to prevent massive oversupply that could harm the growth of the protocol. In practice, this actually gives those who converted from veNEWO more flexibility relative to no ability to unstake before 15 months (on average). tSYNO will receive 10% of all fees generated during the 15 month period.
The Reward Claim Token is a non-transferrable token that will be allocated to users who were veNEWO lockers at the time the proposal snapshot was taken (August 14th, 2023). This token rewards users who were long-term supporters of New Order prior to the merger. This token will be entitled to 50% of the yields generated from treasury assets that are transfered to Synonym. These yields will be paid in ETH.
- The claim token allocation (maximum yield share) will be capped by the veNEWO balance of the wallet at the time of the proposal snapshot (August 14th, 2023).
- A user’s claim tokens will be proportional to the size of their veNEWO position that is converted into SYNO. As such, to receive the maximum allocated amount of the claims token, the whole principal locked under veNEWO should be migrated.
- Ongoing claims into perpetuity will also be proportional to the amount of SYNO that is maintained in the wallets of users who opt to convert. If SYNO is unstaked over time, users will lose the proportional claim on yields via their RCT token. In practice, for users to maintain their full yield claiming power via RCT over time, they should keep the amount of SYNO staked at a 1:1 match to what is converted.