Proposal 1: increase LP rewards until September 18

Proposals
1

Summary

Increase LP rewards for 4 pools (1 Uniswap and 3 Balancer pools) from 9,100 CVP weekly (0.20 per block) to 91,000 CVP weekly instead (2 per block), for a period from ETH block 10749252 to ETH block 10885752: August 28 to September 18.

Motivation

Dedicate a bigger portion of the 5% Community Pool to reward early LPs who took the risk of having lack of information and provided necessary liquidity on Balancer and Uniswap in the early days. That implies the past 2 weeks (backtraced rewards, increased amount from what has been distributed so far) as well as running this reward model for a week extra while the project is bootstrapping gamma round.

Specifications

On August 28 the official communication was as such that early LPs would get rewards. It did not specify how much thought because the model was still in development. On September 6, those back-traced rewards were distributed. However, the community on Discord made it clear that such rewards are not on par with the risk early community members took to support the project and the IL risk (price fluctuated from $4 to $16 and now back to $6). Discord clearly shows the sentiment.

While the expectations did not entail arbitrary gigantic 5000% APY, the rewards distributed are objectively not on par with what the market shows these days and what the community expected. Due to that, I am proposing to the team to dedicate more and support the early contributors, which should build a stronger community.

  1. https://uniswap.info/pair/0x12d4444f96c644385d8ab355f6ddf801315b6254
  2. https://pools.balancer.exchange/#/pool/0xbd7a8f648262b6cb29d38b575df9f27e6cdecde1/
  3. https://pools.balancer.exchange/#/pool/0x10d9b57f769fbb355cdc2f3c076a65a288ddc78e/
  4. https://pools.balancer.exchange/#/pool/0x1af23b311f203844108137d6ee399109e4981401/shares

This would effectively float the total supply over 3 weeks to LPs for 273,000 CVP which is 1.62M USD at the current price of $6 - in the hands of early supporters.

  • Period: August 28 - September 18
  • Block: 10749252 ETH block - 10885752 ETH block
  • Rewards: 2 CVP per block

The weighted rewards are the same per poor, split evenly across 4. While I don’t think it’s good for IL, it’s better to make it this way for now for full transparency - and later on have proper rewards on less pools once a proper LP program starts. While this would lead to different APY per pool, the new average could be seen as around 700% annualized - an improvement from 70%. Of course, if the liquidity increases it lower the APY, that’s how it works. But I believe this is better for the community right now.

Learning from YFI and ser banteg, if this proposal gets good community feedback, it should be followed up by a PIP (PowerPool Improvement Proposal) with the current team approving and distributing the rewards. See more on how it’s done.

Context and Personal Recap

Since this is the first forum proposal, I think a bit of context and transparency are due. I was vocal since day 0 that I was one of the early alpha participants. That is very lucky, I am not hiding that. And I did sell all of it a few days back [at the very bottom, as always] but have now bought back a little bit. Why? I feel obliged and guilty to an extent, that such money came my way, so I feel I should at least somehow contribute back. Does not imply endorsement.

While I fully agree that the initial distribution could have been handled much better, that can’t be reversed now. I feel like PowerPool has interesting ideas, and with enough dedication from the team it could become something cool. I never advertise buying altcoins nor am I a good trader, I just enjoy good research. So if the ideas expressed in the previous articles get delivered, this could be cool. Time will tell.

I believe the governance and the control should be delegated to the community as soon as the groundwork is laid out, so that other protocols would not feel the potential threat from an admin key rigging the entire DeFi space. While I don’t care about CVP price, economic stability is important as well. I would appreciate seeing proper economic research from one of the cool crypto teams, see below.

Ideas for the future to explore and write on:

  • Delegate the funds to a DAO with public signatories. Because the project team is basically anon, key delegation is of utmost importance. As soon as technically possible.
  • More research on how vested beta and gamma participants will vote, whether it’s off-chain quorum or proxy tokens representing locked portions.
  • Announce some of the cool people participating in testing.
  • Publish a long-term term report on the LP model, staking model, GT rewards and so on. Involve Gauntlet, Block Science, or others. For example, the proposal from Delphi Digital was a good start.
  • Overall, learn from how YFI gov works. Build a strong loyal community (while validating the math with experts) and ship this to a broader audience.

Your pleb degen ivangbi

28 Likes
2

FOR this proposal. Rewards would be retroactive I imagine…

2 Likes
3

The risks in the first two weeks are huge. The rewards in the first two weeks should be increased by at least 20 times. The weight of rewards must be differentiated according to the ratio of the liquidity pool to provide liquidity. Uniswap’s 50:50 should be the largest reward. Weight, because the risk of 50:50 is much greater than other pools,
The 19:1, 9:1 liquidity pool should not be the same as the 50:50.

7 Likes
4

If you don’t distinguish the high-risk 50:50 pool from the other 19:1, 9:1 rewards, then the 50:50 liquidity pool will not be provided by anyone and go to the low-risk 19:1 because of the risk Not proportional to the return.

2 Likes
5

LPs will happy with such changes on this local shift of tokenomics.

This will boost a community in a good way, more LPs will be interested in Liquidity Provision specifically here.

:fire:

1 Like
6

Powerpool provide handsome profit to early stage anonymity tester and reduce the reward of LP. It’s a confused decision. Increase LP rewards and lock up part of them will help CVP have a better development.

2 Likes
7

I agree with you. Hope to see a great CVP gov :slight_smile:

1 Like
8

Big +1 here. Don’t see any downsides other than the lack of differentiation between those that risked more IL with the 50/50 pool vs the 10/90. But great start

2 Likes
9

Good call Ivan. I am glad to see early tester of CVP taking actions and not just getting reward. It shows that they care about project and community around.

For the CVP team the right decision in the beginning will play a huge role in the future. I hope they will make right and wise decisions

1 Like
10

I believed in the project from the start. As soon as LP appeared, I immediately threw in liquidity there all my CVP . But I was extremely surprised when I received 70 CVP … I think this is not fair in relation to the early supporters of powerpools

11

For transparency: Beta tester here. I didn’t provide liquidity to any of CVP pools.

I’m FOR Ivan’s proposal. Alpha, Beta, Gamma testers who didn’t buy CVP and didn’t provide liquidity to the pools took zero risks so having early supporters and adopters rewarded proportionally to the risk they took is important and makes total sense to me.

4 Likes
12

this is a no brainer.

1 Like
13

FOR this proposal absolutely, with just one change - distribute the increased rewards among the pools depending on pool size and CVP/ETH proportion.

I had so much confidence in the project that I put CVP into UNI pool (50/50), understanding potential IL risk, but hoping that for such risk the early LP will be fairly compensated. At that moment I even didnt know how the alphas and betas were compensated.

Eventually, we know that despite many of alphas, betas and gammas were compensated like 1000x+ better than early LP, they had not even put their money at risk (comparing to us, early LPs)

So it sounds a bit cocky, but 10x increase in rewards with a backtrace and fair (not equal) distribution among the pools with early LP is the minimum of what CVP can do for the early LPs.

Instead, in the recently published announcement from CVP https://twitter.com/powerpoolcvp/status/1303827493162545154?s=21
we see that everything is completely untransparent and the early LPs are absolutely forgotten again

5 Likes
14

I vote for this proposal :ok_hand:t2:

15

Ok, yesterday nigth I briefly checked the proposal, but now deep dive into details.

In general proposal is fair and have good logical concept, but, we didn’t apply here perspective of community growth and possible LP’s.

One very important moment:

What a point to make it only for 2 past and 1 incoming week?
This will reward only current LP’s and have no influence for future plans and future rewards. As consequence it will no have effect to the future of a project. So possible Liquidity Providers willl be not interested to fill the POOLS and provide a liquidity for $CVP tokenomic.

I suggest to setup 2-2.5 $CVP reward per block and slowly decrease this amount due 2-3 months. This will take much more better effect in a middle term context, because community will be interested to participate in PP life and much more mentioning in DEFI space we will have

3 Likes
16

Great, @ivangbi. This proposal will make LPs great again! Let’s discuss the proportional rewards to the different pools, it seems to be critically important

17

I disagree with giving different pools different weights.

The rationale is that I don’t agree with the statement that the Uniswap pool is riskier than the other two:

  1. If you agree that holding CVP is riskier than holding ETH, then the riskiest pool is the 19:1 because it’s 95% CVP. In that sense, the Uniswap pool would be safer as it offers a hedge against CVP volatility.

  2. If, on the other hand, you think there’s more upside potential to CVP than ETH then the riskiest or “worst” pool would be the 9:1 because you would lose much of that upside, as you’re mostly in ETH.

I think the 3 pools should get the same weight. Each of these pools caters to different investors, with different risk profiles. I don’t see any pool as being riskier or worst than any other one per se. It depends on your assumptions, so at the end of the day it’s a subjective matter.

4 Likes
18

I think, that we need to increase rewards for the mainnet stage. Imagine at least $100m liquidity locked in Power pools. The protocol needs solid liquidity on the market for that (some mainnet LPs will have a desire to sell tokens, and other people to buy). Maybe we can make it 150,000 CVP/week or something like that for the first two months, and then decrease it month-by-month?

19

That’s the LP rewards an early supporters deserve. Good work @ivangbi !

20

Good points @JonathanErlich!

But the sizes of pools should be counted in, otherwise to diff providers of X CVP will be receiving diff compensation which is not fair I believe