LLT Tokenomics

Introduction

DeFi represents a fundamental shift in how financial systems operate, removing traditional intermediaries and enabling direct community control. Within this ecosystem, governance and tokenomics form the foundation of how protocols evolve, make decisions, and create sustainable value for participants.

Amplified Protocol's governance and tokenomics model builds upon lessons learned from the DeFi ecosystem's development. By studying successful implementations in protocols like Uniswap, AAVE, and Frax, Amplified creates a framework that balances efficient decision-making with decentralized control. This approach is particularly crucial in the LST/LRT space, where careful management of staked assets and yield strategies requires both agility and security.

Core Token Structure

In Amplified Protocol, tokens serve multiple critical functions beyond value transfer, including governance participation, stakeholder alignment, and protocol value distribution. Amplified uses a dual-token model comprising LLT (governance token) and ampETH (yield-bearing token), designed to address the unique requirements of LST/LRT management.

• LLT Governance Token: The cornerstone of Amplified’s governance framework, LLT embodies the community’s collective stake in the protocol’s success. By distributing control to stakeholders, LLT ensures that those invested in the protocol’s growth have a direct influence over its direction and decisions.

• ampETH Yield-Bearing Token: Complements LLT by focusing on yield generation, allowing users to participate in the protocol’s staking and liquidity strategies.

Governance Powers of LLT Holders

LLT holders possess substantial influence over the protocol’s future, from protocol upgrades to strategy and economic management:

• Protocol Upgrades:

  • Vote on new features and functionalities.

  • Approve smart contract updates via proxy mechanisms.

  • Authorize emergency measures (e.g., deposit/withdrawal pauses).

  • Direct security enhancements.

• Strategy Management:

  • Adjust risk parameters for protocol safety.

  • Set allocation limits for proper diversification.

  • Whitelist new LST/LRT assets for expanded opportunities.

  • Approve integrations with new DeFi protocols.

• Economic Control:

  • Modify fee structures to ensure sustainability.

  • Manage treasury funds to secure long-term stability.

  • Allocate resources to align incentives within the protocol.

  • Adjust fee models to remain competitive.

Fee Structure Management

LLT holders govern the economic sustainability of the protocol, overseeing fee management, treasury operations, and value distribution:

• Fee Model Management:

  • Set and adjust protocol fee rates on yield generation.

  • Ensure competitive, transparent, and sustainable fee structures.

  • Balance user value with protocol sustainability.

• Treasury Operations:

  • Strategically manage collected fees.

  • Allocate funds for protocol growth and initiatives.

  • Invest treasury assets for future returns.

  • Authorize token buybacks when beneficial.

• Value Distribution:

  • Direct revenue allocation and reserve management.

  • Support liquidity provision and protocol-funded initiatives.

This structured economic control enables Amplified to generate sustainable revenue, build protocol reserves, and support long-term growth initiatives, aligning stakeholder interests through effective resource management.

Operational Oversight

To ensure smooth day-to-day operations, LLT holders provide oversight across various critical functions:

• External Strategy Executor Management: Monitor third-party executors responsible for protocol strategies.

• Oracle System Supervision: Ensure accurate pricing through oracle management.

• Rebalancing Oversight: Oversee rebalancing strategies to maintain optimal capital allocation.

• Vault Monitoring: Track vault compounding processes for efficiency and transparency.

Staking and Voting Power (veLLT)

To align long-term interests and secure governance against manipulation, Amplified uses a vote-escrowed staking mechanism that transforms LLT into veLLT (vote-escrowed LLT). Inspired by models like Curve’s veCRV, this system incentivizes long-term commitment and active governance participation.

• Base Staking:

  • LLT can be staked to receive veLLT at an initial 1:1 conversion ratio.

  • Provides foundational voting power, making governance accessible while maintaining security.

• Enhanced Voting Rights:

  • Lock periods up to 5 years, with voting power scaled up to 2x based on the lock duration.

  • Linear scaling between 1x and 2x multiplier, rewarding long-term alignment.

• Delegation System:

  • Flexible options for delegating voting power.

  • Allows passive holders to have their interests represented by active community members.

  • Enhances governance participation while preserving decentralized decision-making.