ICYMI, we just announced a crucial update on issuing trading rewards, transitioning from issuing liquid $ORDER tokens to esORDER. This update is a response to community feedback and a strategic way to create a smaller supply and burn mechanism for $ORDER holders, further enhancing ecosystem stability.
To understand what’s happening, let’s break down how $ORDER, esORDER, and VALOR work together to support staking, earning, and Orderly’s broader deflationary economy.
$ORDER is the primary token of the Orderly ecosystem. You can stake it directly to earn rewards, specifically by accruing VALOR, a rewards metric (not a token) that can be converted to USDC based on protocol treasury reserves.
Btw, 60% of Orderly’s net revenues are deposited into the treasury pool, reserved for VALOR holders.
How it works
When you stake $ORDER, you start earning VALOR, the metric that measures your stake's value over time. The amount of VALOR you accrue is directly proportional to the $ORDER you stake, representing your share of the overall treasury pool at that point in time.
Think of esORDER as a temporary version of Orderly's main token, $ORDER. It's like getting a voucher that can later be turned into the real thing. esORDER is earned as rewards for trading or being a market maker on Orderly, but it’s not immediately the same as $ORDER.
Initially slated to take effect during epoch 10 of $ORDER staking, esORDER has now been rolled out as trading and MM rewards from epoch 7. The esORDER (escrowed ORDER token) replaces liquid $ORDER as rewards to traders and market makers (liquidity providers). This is to ensure price stability by limiting the emission of inflated $ORDER tokens.
How it works
When you get esORDER, you have a choice: either hold onto it until it unlocks (called Vesting) and becomes $ORDER, or stake it to get all the same benefits as staking $ORDER. Staking esORDER gets you VALOR (plugging you directly to the treasury pool and further increasing their rewards), just like staking $ORDER.
Alternatively, you could also vest it over time to eventually redeem into $ORDER.
If you are eager to redeem esORDER for liquid $ORDER ahead of the full vesting period, you can do so after 15 days. However, only 50% of the reward will be redeemed, with the other 50% permanently burned. This burn reduces the total $ORDER supply, benefitting long-term holders.
VALOR is not a tradable token. It is a value metric that accumulates as you stake $ORDER or esORDER, reflecting your contribution to the staking pool over time. As the protocol grows, so does the USDC treasury that backs VALOR, making it redeemable for USDC at the prevailing treasury valuation.
Whenever you redeem VALOR, the amount of VALOR tokens you redeem is burned, ensuring a deflationary circulating supply, making the remaining VALOR holdings more valuable. VALOR redemption requests are settled in USDC every 14 days. Regardless of when you submit a request, you receive USDC based on the final VALOR price for that period.
When you choose to delay your redemption, you continue to accrue VALOR, increasing your rewards potential and your weighted share of the treasury (depending on the overall stakes in the next reward epoch). See our simplified explanation about the benefit of delayed VALOR redemption at this link.
The move to esORDER aims to reduce supply by limiting the immediate availability of reward tokens. By allowing rewards to be vested over time, esORDER reduces the risk of large sell-offs, giving long-term stakers greater value and creating a healthy, deflationary effect with burned tokens.
Here is a quick example:
Let’s say Sharon, an Orderly Network trader, has earned 200 esORDER. She has two options:
The $ORDER, esORDER, and VALOR trio form a mutually beneficial system:
Epoch 7 is on! Earn your share of the 1.2m $ORDER reward pool, begin your staking journey here: https://app.orderly.network/staking
Learn more about esORDER here
