# **P6 Implementation Plan** Authored by [Aaluxx Myth](https://gitlab.com/AaluxxMyth) **Background:** Following the majority approval of [Proposal 6](https://gitlab.com/-/snippets/4801556) by node operators, the THORChain community can expect its swift and precise implementation in alignment with the network’s consensus. **Goal:** implement [Proposal 6](https://gitlab.com/-/snippets/4801556) with speed and simplicity, minimizing time-to-launch and code complexity while ensuring full transparency on implementation details for the community. After discussions with Node Operators, the community and devs, the decision has been made to split the rollout of P6 in four structured phases. THORFI Debt is dollarized at time of node pause. Users can track claims here: https://rune.tools/debt The difference between v1 and v2 of this implementation plan is to cope with the following amendment to [make DLP exposure to synths indefinite](https://gitlab.com/thorchain/thornode/-/issues/2154) ## **PHASE 0: Economic Tweaks** **Priority:** NOW **Time Dimension:** ASAP This phase looks to replace systemic RUNE sell pressure with systemic RUNE buy pressure. This is a first step on the path to recovery, and price movement in the wrong direction will actually increase this Phase’s impact (lower RUNE price \= more RUNE burnt, etc.) 1. Keep “SYSTEMINCOMEBURNRATEBPS” RUNE at 5%, making adjustments \- increasing or decreasing this value \- with evidence. There is a **large argument** to increase burn up to 30-50%, this will be explained to the community over the next weeks, and a separate node vote held for this end. 2. Set "EMISSIONCURVE" \-\> 100000 to reduce block rewards effectively down to zero. (translates to Reserve / Emission curve, at current values \~720 rune per year, i.e. nothing). 3. ADR to Pause LP **adds** to pools with many synth_units in the next version, with withdrawals open. Pools with low synth_units will simply have those synths converted to DLP, and adding/withdrawing will both be enabled. Pools with no synth_units and new pools also remain unchanged, with adding/withdrawing both enabled. The team will constantly monitor RUNE burn and EMISSIONCURVE (or who gets it) to target **at least** 5% APY for nodes (using Node Mimir to vote on changes), but these measures are necessary short term to stabilize rune. We will call for votes on adjustments if APY falls and persists below this level. Note that the system income split between DLPs and nodes will continue to be subject to the Incentive Pendulum. ## **PHASE 1: Stakeholder Relief** **Priority:** MAX **Time Dimension:** Weeks 1. Create the TCY\_Fund module to collect 10% of swap fees in RUNE and distribute it every 14400 blocks (one day) pro-rata to TCY token holdings per wallet. TCY has no decimals, and the fund distributes in multiples of 2.05000000 RUNE. 2. The TCY will begin sitting in a claiming module, from which the TCY is sent to the user according to each user’s allocation. We mint 205M TCY, 202M to be distributed 1-1 according to the following balances (picture below). The remaining 3M TCY will be used to seed the TCY/RUNE pool with $300k RUNE at the initial price of $0.10 per TCY.  3. Create a TCY claiming memo of the form TCY:\<ThorAddress\> to be sent by affected users from the chain they added their original positions with. Have a list available for claims on-chain, with the wallet:TCY allocation information to send the appropriate amount of TCY to the submitted Thorchain address. 4. The claiming module accumulates RUNE from A. payouts of any unclaimed TCY in the module and B. swap fees from the TCY/RUNE pool; to buy back TCY from the TCY/RUNE pool. It will remain buying TCY indefinitely so long as it has a TCY token balance and thus RUNE payouts to buy with; creating a constant buy bid of TCY.  5. Synth_Supply is now considered a last resort Liquidity Reserve, ensuring the health of the protocol to pay TCY holders over the long run. They remain as synths _indefinitely_ to keep the leverage now working in favor of DLPs. 6. To ensure affected/incumbent DLPs are the sole benefactors of the positive synth leverage, modify code to allow for only withdrawals from affected pools, with no adds. This will be done by pool for heavily synth leveraged pools, pools with no synths or very few synths will by "unsynthed" and behave normally with LP add/withdraw. The Protocol will need to quickly move forward with v3 liquidity for new liquidity. 6. Pause RUNEPool deposits and pause PoL from selling RUNE into pools (purchasing LP units). Current PoL liquidity will remain indefinitely. 7. Hard pause Lending and Savers, eliminating memos required for opening and closing positions. 8. Revisit "SYSTEMINCOMEBURNRATEBPS" (generously) and "EMISSIONCURVE" (more conservatively) to see whether their values need to again be increased or decreased. 9. TC Treasury will buy at least $5,000,000 of TCY from the pool (using exogenous assets to buy) in the first 3 months after the TCY/RUNE pool creation to support the market.  Thorchain is now systematically net buying RUNE via the Burn mechanism. And this is good, since the priority of Phase 1 is to stimulate RUNE price appreciation. DLPs relief is provided by **positive leverage** of synths indefinitely (negative cannot happen since the protocol will never realize it for them, only DLPs choose when to realize their gains or losses), TCY holders are getting paid 10% swap fees, the protocol is now net buying instead of net selling RUNE thus becoming more attractive to RUNE holders as well and we continue carefully monitoring Nodes get a fair APY while also benefiting from the stronger RUNE price. ## **PHASE 2: Stability** **Priority:** High **Time Dimension:** Weeks/Months 1. Out of the TCY purchased by the TC Treasury, the first 3M TCY will be given back to the TCY claiming module to account for the 3M extra TCY minted to seed the pool. As all TCY in the claiming module, it will use its RUNE proceeds to keep bidding on TCY and acquire a larger share of the protocol revenues continuously. 2. Revisit "SYSTEMINCOMEBURNRATEBPS" (generously) and "EMISSIONCURVE" (more conservatively) to see whether their values need to again be increased or decreased. ## **PHASE 3: Capital Efficiency** **Priority:** After Solana and App Layer **Time Dimension:** Months 1. Implement \*optional Liquidity Nodes for DLPs to be able to get extra yield by bonding, getting DLPs involved in governance and allowing the network to be more capital efficient to recoup APY from the forfeited 10% of swap fees. 2. Analyze any other step we could take to make the protocol more capital efficient; especially v3-style-liquidity with separate accounting from the current liquidity, which will become a backstop to the more active liquidity. 3. Revisit "SYSTEMINCOMEBURNRATEBPS" (generously) and "EMISSIONCURVE" (more conservatively) to see whether their values need to again be increased or decreased. At this end state, it is desirable to have RUNE burn up to 60% even. Now with the App Layer online, additional income can be routed to the Incentive Pendulum, to DLPs, to Validators or to buy back and burn RUNE, or some combination of them; depending on the needs of the Network. ## **PHASE 4: ThorFi Code Removal** **Priority:** Low **Time Dimension:** Years 1. Wipe lending/saver position data. 2. Eliminate all obsolete code from ThorFi.