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.
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.
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.
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