Social escrow: Paraswap’s new plot against token depletion

Paraswap community, a leading DeFi aggregator, is mulling a proposal that will alter the approach to earning rewards, namely escrow. The proposal would execute with a new social escrow scheme which comes in the form of native token emissions and redistribution of purchasing fees to earn rewards.

The social escrow system will reward users for performing actions that benefit the ParaSwap protocol. It slightly differs from the existing agreement, where users stake their tokens and receive a reward from ParaSwap’s generated token.

Some socially beneficial activities include introducing new users via referral links, staking the platform’s native coin, and trading on the protocol. As per the new model, the users are to be rewarded for performing any of these activities.

According to Mounir Benchemled, the founder of ParaSwap, social escrow engages better user participation than vote-locked escrow, which locks up the account holder’s token to get more voting rights. The new model encourages users to participate and trade in governance. Mounir Benchemled said the more the users carry these activities, the higher they score and the greater their protocol share will be.

As said by Benchemled, metrics like the number of users who stake their native tokens and the number of referrals generated can be tracked.

With the modification to a social escrow scheme, ParaSwap became a component of a larger tokenomics change. It aims to change the protocol from its current model to one with reduced token emissions.

The change suggested currently awaits the decision and implementation, as per the agreement and opinions of the ParaSwap community members.

Trevor Holman

Trevor Holman follows crypto industry since 2011. He joined CryptoNewsZ as a news writer and he provides technical analysis pieces and current market data. He is also an avid trader. In his free time, he loves to explore unexplored places.

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