Proposal 45: BSCDEFI Launch - CVP for CAKE for PancakeSwap Pool

Summary
Launch of BSCDEFI on BSC via PancakeSwap will require the DAO to set aside (earmark) $400k CVP equivalent from the PowerPool multi-sig for PancakeSwap Syrup pool rewards to add CAKE rewards for LPs of the launch BSCDEFI/BNB pair. The earmarked CVP tokens will actually be delivered to PancakeSwap only if our proposal for BSCDEFI/BNB launch pool CAKE rewards is approved by PancakeSwap DAO.

Abstract
Launching BSCDEFI on BSC will begin with an incentivised launch pool offering CAKE rewards on PancakeSwap, the dominant DEX on BSC. PowerPool DAO must fund the launch pool proposal to PancakeSwap DAO in CVP, in order to provide the CAKE portion of the rewards allocation for the BSCDEFI/BNB pool. This proposal is to first earmark (set aside) and later, upon approval of our launch pool proposal, transfer $US 400k CVP equivalent from PowerPool multisig to PancakeSwap Syrup Pool.

Motivation
PowerPool is now ready to launch the new BSCDEFI pool and has completed development of the related infrastructure on Binance Smart Chain (such as CVP listing on the BSC official bridge and Power Agent infrastructure).

Offering CAKE rewards is practically required in the BSC investor community to attract individual LPs into the launch pool. The CVP token rewards alone would not have sufficient recognition to attract BSC LPs in sufficient volume. As PowerPool and the Power Universe go multi-chain, it will become common to follow this model to collaborate with leading initial launch DEXes on each chain.

Once the proposed PowerPool launch pool is approved by Pancakeswap DAO, LPs on BSC depositing to the BSCDEFI/BNB launch pool pair will earn rewards of ~750 CAKE per day for 60 days = ~45,000 CAKE total (approximately). Therefore, the PowerPool DAO needs to earmark (set aside) these CVP tokens.

Specifications
After discussion with PancakeSwap community members, we decided to offer $US 400k equivalent of CVP tokens to Syrup Pool and in return for a 0.5x multiplier on the BSCDEFI/BNB pair. This means that the CAKE allocation for the launch pool pair will be ~750 CAKE per day for 60 days. Both CAKE and CVP liquidity mining will last 60 days, and therefore the total amount of CAKE rewards allocated to the BSCDEFI/BNB pair will be ~45,000 CAKE.

Note, that CAKE and CVP numbers are given approximate and can change due to the volatility.

CVP amount for the transfer will be calculated based on average price during the last 7 days prior to the moment of transaction. Currently, this number is ~285,000 CVP.

The US$ 400k in CVP will be transferred only if and when the proposal for BSCDEFI/BNB pair CAKE rewards is approved by the PancakeSwap DAO community.

Conclusion
The Executive Group (Core Team+Management Board) are unanimous in recommending that the DAO earmark the proposed CVP to enable a proposal to PancakeSwap DAO.

2 Likes

Due to massive inflow of assets and money to BSC especially retail investors and traders, I believe that any partnership with BSC (even though its centralized as fuck) is good for PowerPool. Well done boyz

I think it is a great idea. The great majority of Altcoin Farms on pancake have around 10 to 50 million of liquidity. If BSCDEFI Index pool bootstraps those numbers, the $400k CVP will have paid off in a big way. Which could also atract new users and contributors to Powerpool.

I question the need for secondary market liquidity pools. Why do we not go for
A zap in&out a la YLA
B mint/redeem from/to some/all underlying tokens

as the primary means of people buying and selling

On YLA and ASSY we consistently see gaps between nav and secondary mearket price. If someone arbs it via primary market, that’s more slippage and gas on the community pool.

That money would pay for a lot of developer time that could improve core functions and products instead.

1 Like

On the point about potentially necessary for shorts or for derivatives - i suspect that we will never match the liquidity of the underlying tokens. We’d be better served putting it on a lending platform maybe with a cvp subsidy to assure availability, and let any shorters redeem to underlying or zap out.

On ETFs and CEFs in TradFi, this is quite common - you redeem the fund to an AP into a creation unit and sell the underlying stocks - except for a handful of major products and for those that specialized in less liquid product like EM bonds or HY bonds, this is the only way to get something done fast in size. You can if you want see how many stock ETFs have more dollars/day traded than their #1 holding, i suspect there’s a couple dozen out of the thousand or so that exist.

There will be zap for entering and exiting BSCDEFI

Interesting…for understanding, let me ask if your suggested option is something like:
1.) No DEX LP pool for secondary liquidity, just mint and redeem via our contract?
2.) No synthetic partner instrument for hedging, just get the pool token approved on a lending site, subsidize on the lending site to ensure liquidity, so that those wishing to short can borrow and redeem for underlying, later buying underlying back (hopefully for less), minting again and paying back the pool token on the lending site?

Is this a good summmary? Is this more an institutional or retail strategy?

We approved the DAO budget in proposal 44, there is enough money to fund development, marketing and a lot of other costs (R&D, data analytics, etc)

Hello

Yes on 1 (mint / redeem either zap from cash or from underlying if someone is in a rush and can’t wait or is doing chunky size)

On 2 - no secondary market on pancakes wap or similar. I think an SNX style would be a great fit, but to my knowledge doesn’t exist on BSC. Lending protocols are good because people can use it either for extra yield or for collateral for borrowing - Pancakes wap just let’s you swap for BNB and onwards to other products.

If we can get a decent size on a lending platform, this’d work for both retail an institutional size. As long as utilization is below 90% the borrow rate stays reasonable.

If you can redeem for underlying, there is no practical limit to liquidity than the tvl on lending platform and the least liquid underlying - borrow, redeem, sell components one by one if you are doing a million dollars or more in one gulp. this could easily support a short of like 10% of the whole tvl - well never get that level of liquidity on pancakes wap. If you’re a small holder i guess you’d zap to cash and time the borrow to be at the window.

It also means no IL for stakers, just the counterparty risk on lending platform, which is usually preferred if you think token will outperform (which we all hope!)

You’d need to have lending protocols use an oracle on a sum of parts basis is the only challenge.

I’m sure we can find a good use of 400K - maybe synchronized zap in/out with netting between entrants and exitors to reduce slippage and gas for all the zap contracts.

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I understand that having to buy CAKE and use a DEX for a (secondary) launch pool feels like going back to ICO days and extortionate exchange listing fees. But we are new to BSC and a PancakeSwap pool with CAKE and hoopla from the underlying tokens and BSC central can generate a lot of buzz. Difficult to see how to do that with a simple plea to “go to our site, buy 10+ tokens and mint” This is effectively what we will be saying to the underwriters of the launch pool on soft launch, and for those who understand it, the option will be there…

Regarding the lending site as a means to short (so we do not have to rely on Spartan), this too is in the plan, but getting BSCDEFI listed on a BSC lending site with NO secondary DEX pool will be an uphill battle.

Also, if there IS a BSC DEX pool, a borrower can just sell BSCDEFI, rather than have to redeem/mint again. The argument for saving small investors the gas they would need to mint & redeem is of course stronger on Ethereum, but again, we are not closing off those options, just hoping that smaller Asian investors will pile into BSCDEFI if they can LP the pool tokens on PancakeSwap and earn more CAKE (in addition to the CAKE yield from auto-staking the underlying 4O% CAKE in BSCDEFI)

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The cooperation with PCS is necessary because we are new to BSC and it is obvious that PowerPool had few users and no one knew us. This event is a good use for ad to attract more retail investors.
In crypto, If your token’s market cap ranking is under 150, no user will trust you because your market power is not solid and any advantages of your technique is bragging.

Good point on the liquidation - lending sites can’t wait for zap windows. Though lending site would need liquidity proportional to collat limits to be respected, so they may be stuck with redeem and sell the pieces if their technology can handle that unless we provide an SC that does it in a single step (which i suppose we could).

I still worry about the lack of good synchronization mechanisms to the NAV.

Maybe a better long term position could be to make it a dollar pool instead, and then to have the zap contract execute a mix of primary transaction and secondary (e.g. zap in will buy from pancake pool if it is undervalued there until it reaches nav, then mint the rest; zap out will sell to pancake pool to make it reach nav, then redeem the rest). This avoids the endless why is ASSY not keeping up with AAVE and why is YLA price down today question that wind up ruining our core message.

I really think we as a protocol need to get away from these lousy XY=c AMMs as a means of providing liquidity.

I also wonder the retention rate post incentives on the pool… Historically pp has been overdependence on using cvp to drive people to use our products, when that’s a resource better used to enhance our products to make them more attractive.

And for driving business, would a partnership with a major lender not also provide the same kind of benefit?

What do other fund like protocols do? Are they all using this structure? Has anyone done a peer comparison?

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And doing the CVp rewards via beefy obe an idea to consider through their launchpad or is that not high profile enough? It may be a different user set, and i don’t know if there are data to suggest whether they are likely to be stickier or flighty. There’s at least one or two others of those compound protocols.

BSC Lender Venus/XVS (owned by Swipe wallet and Binance) is a 15% component of BSCDEFI, so yes, we will be talking to them and using our meta-governance muscle from the (hopefully) growing amount of XVS in the pool to get listings for CVP & BSCDEFI…

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The problem with launchpads is that PowerPool is already proven, with TVL at scale, and just launching thematic pools. I am hoping that the new Balancer MetaStable Pools will give us a useful new launching option, since the tokens in our DeFi pools are highly correlated, at least for now…

I think using the Zap as a means of controlling NAV drift by splitting incoming funds between primary (minting) and secondary DEX pools is a very intriguing idea too…

The SparkProd Team is all about intelligent optimization, and this seems worth trying…

The next proposal will deal with CVP rewards policy for existing pools…look forward to hearing from you on that too…

All the best, Gordon

Have you read this ? Maybe we can use it! https://link.medium.com/20X2rTtHNib

@curmudgeon I think you bring up extremely valuable points (I love the split incoming funds concept & want to explore that further) that we need to consider for the future but I do believe that value of getting the additional BSC retail exposure from PancakeSwap is what will allow PP to reap the rewards of the investment.

This proposal seems to be the next logical step in what PP needs to get more eyes on the project. It then only seems logical to pursue the lending sites afterwards.

Full support from me in general.

Yes…it is already posted in the Wiki…if you would like to help us and move right up to the ‘coalface’ where the work is being done, ask Dr Gonzo to permission you for SparkProd (Product Development) on Discord and the Wiki…

Thanks for your interest