Hey all!
DUST has been losing value pretty quickly, and I think it’s worth a discussion before this turns into a formal vote. The good news: we don’t need new contracts to address this. Neverland already has several parameters built in that can shift the balance between DUST supply and demand we just haven’t been using them aggressively enough (or making them visible enough to users). Wanted to lay these out and get community feedback before drafting anything formal.
Quick context on why this is happening
Emissions scale with supply/borrow activity, not with DUST demand. So as TVL grows, DUST emissions grow with it but that doesn’t mean lock demand or buybacks are growing at the same rate. Net result: more DUST hitting the market than is being absorbed. We do have a liquid-claim penalty (currently 50%, burned) acting as a brake, but it looks like it’s not enough right now.
Ideas on the table:
1. Send more revenue to buybacks veDUST holders already vote each epoch on how protocol revenue gets split veDUST rewards, LP incentives, or buybacks & burns. Right now it feels light on the buyback side. Bumping that allocation up would mean real revenue-backed buy pressure instead of relying only on emissions/burns to do the work.
2. Raise the liquid-claim penalty Currently 50% of a liquid claim gets burned. Pushing this to something like 65-75% would make farm-and-dump behavior less attractive and burn more supply per claim. Could phase this in over a few epochs so it’s not a shock to active users.
3. Cut emissions on markets that aren’t pulling their weight Some pools are probably attracting short-term farmers more than sticky liquidity. Worth auditing per-market emission rates and shifting weight toward core markets (majors/stables) that actually generate meaningful revenue.
4. Make the lock APR flywheel visible Effective lock APR already rises automatically as fewer people lock it’s a self-correcting mechanism. Problem is most users probably don’t see this number anywhere obvious. Putting “current effective lock APR” front and center on the dashboard/claim screen could meaningfully shift behavior toward locking instead of dumping.
5. Push Self-Repay harder Self-Repay routes rewards straight into paying down debt instead of claiming liquid and selling. It exists but feels underused. A prompt at borrow-time and in the claim flow could drive adoption.
6. (Longer-term) Protocol-owned liquidity Instead of only doing open-market buybacks, we could seed a DUST/stable LP position directly from treasury revenue. Deeper liquidity = less slippage/volatility either direction. This one needs more design work, so flagging it for later rather than proposing it now.
What I’d want feedback on before drafting a formal NIP:
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Does the community think the buyback allocation and penalty % should move, and by how much?
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Any markets people think are clearly over-incentivized right now?
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Is a phased penalty increase (e.g. 50% → 60% → 70% over 3 epochs) the right pace, or too slow given how fast price is moving?
Not trying to push a specific number here yet mostly want to get consensus on direction before it goes to a vote. Curious what others think, especially anyone who’s been tracking the emission/revenue numbers more closely than I have.