Vector Finance Slashes VTX Emissions by 75%: The Strategy Behind the Move

Vector Finance
3 min readJul 10, 2023

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Vector Finance has recently made some extraordinary and potentially game-changing moves to our tokenomics: a 75% reduction in VTX emissions. This bold strategy stands to impact numerous aspects of the protocol and its partners. In the following sections, we delve into the details, exploring the reason behind the change and what it signifies for the protocol and its stakeholders.

The VTX Emission Cut

The reduction of VTX emissions by 75% profoundly affects the protocol’s operations, strategies, and long-term viability. The reduction of VTX emissions primarily impacts three components of what we’re doing: the xPTP Program, the zJOE Program, and the LVTX Pool.

xPTP Program: Sustaining High Returns Without VTX Incentives

Vector’s xPTP program, in partnership with Platypus Finance, has been a resounding success, delivering an annual percentage return (APR) of more than 50% to its holders. These high returns are comprised of a 31% real yield, 12% from xHUM distribtuon on Athena Finance, and 9% from VTX emissions.

Interestingly, with the VTX emissions cut, the real yield remains robust, proving the program’s inherent strength and eliminating the need for additional VTX incentives. The xPTP program continues to stand out as an optimal platform for gaining rewards within the Platypus Finance ecosystem.

zJOE Program: Yield Generation Independent of VTX Emissions

The zJOE program has undergone significant changes, leading to comparable yield generation to sJOE on Trader Joe, dependent on the ratio. Currently, it’s earning around 5.1% APR in USDC consistently, with variability based on trading volume.

Initially, the zJOE product’s growth was maintained via consistent VTX emissions. However, with the upcoming introduction of floor price protection for zJOE and yield optimization between Avalanche and Arbitrum, VTX emissions are no longer needed for the program to thrive.

LVTX Pool: Maintaining a Healthy APR

The VTX emission cut also affects the LVTX pool, reducing the total emissions to this pool and lowering token dilution for lockers. Despite this, the pool maintains a healthy APR for its lockers, provided by the real yield from our protocol fee.

A Future of Growth and Added Value

Overall, the 75% reduction in VTX emissions has been executed strategically to stop the slow value drain of Vector’s token. The aim is to provide the protocol with an opportunity to add more value by incorporating additional protocols and expanding the token’s utility, all without diluting the holdings of existing stakeholders.

As Vector Finance navigates through this significant transition, we are eager to see how this strategy unfolds and shapes the protocol’s future. It’s worth keeping an eye out for exciting news about the next phase of Vector Finance and the upcoming developments in our protocol aggregation program.

About Vector Finance

Vector Finance is the number one yield booster on Avalanche. We’re building unique DeFi strategies to for our users to earn more on their assets!

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