Secondary token (BEAMX)

Liquity's secondary token, LQTY, is not a governance token — its only utility is to be a pure profit-sharing token. An immutable decentralized application like Liquity doesn't need a governance token, but a pure profit-sharing token could be treated as unregistered security by authorities.

Nephrite's approach

Nephrite plans to distribute collected fees among BEAMX holders via the BeamX DAO regular revenue distribution procedure. BeamX DAO distributes its revenue as a reward for DAO management — these rewards are not passive income. Only BEAMX holders who vote on all current proposals are eligible.

A two-way deal with BeamX DAO

BeamX DAO doesn't get Nephrite's fees for free. Nephrite's proposal is to allocate a share of BEAMX from the DAO's Liquidity Mining fund to reward Nephrite's Stability Pool depositors — with no investor or team allocation, only depositor rewards. The merging proposal will be published on the Beam governance forum before mainnet launch.

Numbers

• Liquity distributes 33.3% of LQTY total supply among Stability Pool depositors and frontend operators over 35 months.
• Nephrite aims to receive 6% of BEAMX total supply and distribute it to Stability Pool depositors over 24 months.

The Nephrite Stability Pool depositor's eventual share of fees will be roughly 5× smaller than Liquity's. In exchange, depositors get:

• The right to participate in BeamX DAO governance.
• An additional revenue stream from the growing number of dApps launched by the DAO.
• Access for Nephrite to BeamX DAO's development, liquidity-mining, and promotion resources.