# \[PIP #19\] - Reallocating Protocol Revenue (Vote Rewards and Base Rewards)
**URL:** https://gov.magpiexyz.io/t/pip-19-reallocating-protocol-revenue-vote-rewards-and-base-rewards/726
**Category:** 4. Penpie Improvement Proposal
**Created:** [August 8, 2025, 12:20am UTC](https://gov.magpiexyz.io/t/pip-19-reallocating-protocol-revenue-vote-rewards-and-base-rewards/726 "2025-08-08T00:20:41Z")
**Posts on this page:** 5
**Page:** 1
### Author:  [@Juapia-Magpie](https://gov.magpiexyz.io/u/Juapia-Magpie)
#### Post date: [August 8, 2025, 12:20am UTC](https://gov.magpiexyz.io/t/pip-19-reallocating-protocol-revenue-vote-rewards-and-base-rewards/726/1 "2025-08-08T00:20:41Z")
# **Abstract**
This proposal introduces a strategic adjustment to the allocation of base rewards and vote rewards, in alignment with the latest mechanism introduced by the Pendle team. The adjustment will help Penpie direct its vePENDLE holdings more effectively toward the appropriate pools, further promoting a positive and sustainable development of the ecosystem. This proposal will also adhere to the guidelines set forth in PIP-15.
# **Motivation**
In response to Pendle’s recently announced Dynamic Pool Incentive Caps mechanism, Penpie needs to adjust its current reward allocation strategy to better align with this new direction. This adjustment aims to direct vePENDLE votes more effectively toward high-efficiency pools, ensuring long-term sustainability and capital efficiency for the protocol. Based on June data, several positive impacts further justify this proposal:
- **Alignment with Pendle’s new mechanism:** This adjustment helps Penpie better align its vePENDLE votes with pools that contribute higher swap fees, which is consistent with Pendle’s long-term incentive direction.
- **Increased utility of vlPNP:** Under the new structure, vlPNP holders can more effectively earn voter APR, partially offsetting the impact of reduced bribes.
- **Indirect boost to YT minting incentives:** Redirecting votes to active pools increases the appeal of YT minting, leading to greater trading activity and deeper liquidity.
- **Higher base protocol revenue:** Increased YT minting naturally leads to more AMM swap fees, boosting Penpie’s base income.
- **mPENDLE buyback increases:** According to simulated June data, the amount of mPENDLE being bought back actually increases post-adjustment, indicating a more efficient and sustainable reward structure.
In summary, this proposal ensures that Penpie adapts to Pendle’s evolving incentive system while further optimizing reward efficiency and economic sustainability within the ecosystem.
# **Specification**
**vePENDLE’s Vote Rewards**
vlPNP voter rewards will be paid directly in USDT.
The 20% share of voter fee revenue allocated to PRT will be covered by the base revenue.
**vePENDLE’s Base Rewards**
## Attachment:
**June Revenue Distribution with New Model**
$28,178 more in mPENDLE would have been repurchased compared to the current proposal.
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### Author:  [@Juapia-Magpie](https://gov.magpiexyz.io/u/Juapia-Magpie)
#### Post date: [August 8, 2025, 12:26am UTC](https://gov.magpiexyz.io/t/pip-19-reallocating-protocol-revenue-vote-rewards-and-base-rewards/726/2 "2025-08-08T00:26:31Z")
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### Author:  [@can78](https://gov.magpiexyz.io/u/can78)
#### Post date: [August 8, 2025, 12:39am UTC](https://gov.magpiexyz.io/t/pip-19-reallocating-protocol-revenue-vote-rewards-and-base-rewards/726/3 "2025-08-08T00:39:27Z")
Support this proposal to release full power of vlpnp vote
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### Author:  [@Juapia-Magpie](https://gov.magpiexyz.io/u/Juapia-Magpie)
#### Post date: [August 8, 2025, 1:44am UTC](https://gov.magpiexyz.io/t/pip-19-reallocating-protocol-revenue-vote-rewards-and-base-rewards/726/4 "2025-08-08T01:44:24Z")
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### Author:  [@0xjo](https://gov.magpiexyz.io/u/0xjo)
#### Post date: [August 8, 2025, 6:02am UTC](https://gov.magpiexyz.io/t/pip-19-reallocating-protocol-revenue-vote-rewards-and-base-rewards/726/5 "2025-08-08T06:02:22Z")
i do, i support this pip as it serves best interesting for all pnp mp vependle holders now