Proposal 47: Update current CVP liquidity mining programs

Summary
Decrease CVP inflation by decreasing the mining rewards in existing pools. There are 3 rounds of decreasing inflation. Note, that current CVP inflation from liquidity mining programs is 2.545 CVP/Block.

  1. Round 1: starting 26th September to 25th October inclusive ( 30 days ) to 1.5 CVP/block
  2. Round 2: starting 26th October to 24th November inclusive ( 30 days ) to 1.1 CVP/block
  3. Round 3: starting 25th November to 25th December inclusive ( 30 days ) to 0.8 CVP/block

Motivation
PowerPool undergoes the transformation according to the new vision. The current Liquidity Mining program provides too much inflation for CVP and it looks not reasonable taking into account the new upcoming product line. As an introduction to this proposal, let’s explore the current rewards structure:

Table 1. Current CVP rewards for existing pools

*YLA generates ~18% APY in USDC from Yearn Vaults not related to the CVP LM program

So, current inflation from the CVP LM program is about 497k CVP per month, $705,000 in USD equivalent. Also, we need to take into account that there are other sources of inflation as well - testers’ vested tokens, multi-sig payments, Power Agent rewards.

YLA consumes 150k CVP rewards per month (less than ⅓ of overall rewards size) while providing 62.6% of PowerPool TVL; YLA: $14,975,000 TVL, PowerPool $23,923,000 total TVL. Sources: https://defillama.com/protocols/indexes and https://powerindex.io/#/mainnet/

So, it is evident that the current LM program is inefficient and should be revised. It is necessary to preserve CVP value, limit inflation, and use CVP holdings belonging to the DAO more efficiently.

My proposal is to decrease CVP rewards in three rounds (see specification below).

Specification
I propose to update the liquidity mining program and set up the following rewards starting from 22 Sep 2021. The presented numbers were defined based on PowerPool aims:
(1) Acquire TVL into YLA, based on high USDC APY + CVP boost opportunity

(2) Slowly but surely deprecate legacy pools
(3) Have the opportunity to allocate saved CVPs to new products and PowerPools deployed to other networks (via separate proposals).

Also, one of main points was to maximize rewards for CVP holders (CVP boost) and CVP-ETH LPs, while decreasing rewards for product users.

Note, that APY numbers are very approximate since it greatly depends on CVP/USD exchange rate. It means that these APY can be several times higher if the CVP price goes up.

Table 2. Proposed CVP rewards for existing pools from 26th Sep by 25th Oct

Table 3. Proposed CVP rewards for existing pools from 26th Oct by 24th Nov

Table 4. Proposed CVP rewards for existing pools from 25th Nov by 25th Dec

Also, my thoughts regarding yield generation in PowerPool:

  1. Any product should generate solid APY not based on CVP emission. YLA is a great example of this approach. The next product expected to deliver this is BSCDEFI with ~40% APY projected from staking pool assets
  2. xCVP should become one of the best opportunities to earn CVP by staking CVP, additionally to current CVP boost programs.

The advantage of both options is zero CVP inflation.

Conclusion
I propose to revise the CVP liquidity mining program with the aim to decrease inflation and provide “room” for possible future rewards for PowerPool new products (via additional proposals). The current 2.545 CVP/block rate should be decreased to 0.80 CVP/block in 3 months.

5 Likes

I think it’d be important to make sure ASSY tvl has a value added home before expiry of the cvp boosted rewards. Currently it only does x sushi while we could do something value add with the aave for sure (stake), snx (more convoluted staking), and yearn (lend it?). Otherwise it makes sense for people to crack it open even just for aave staking of half the value.

Can we calibrate the elimination of cvp rewards for it to launch of ppdefi with migration contract, as I don’t imagine we want to add the other tokens staking to the assy contract?

1 Like

Personally I am also an ASSY holder. But decreasing and stopping cvp rewards for all pools ASAP especially an old pool like ASSY is necessary and I support this proposal.

In my view it’s shallow thinking and unhealthy to keep ASSY cvp rewards at this point. Its really just bad inflation.

Pipt and yeti got their rewards cut ages ago and assy should have followed.

In my view no point in adding remaining staking strategies (aave, synthetix, yfi to ASSY) when this pool will be deprecated anyway for a similar and better product ppdefi.

Best to let rewards for this pool slowly decrease and the proposal gives people a fair notice. And if people want to move away and earn cvp instead thats fine, there is xCVP for that which is actually going to benefit everyone.

I care more about how the unnecessary inflation could be stopped and value brought back to this coin you earned rather than just keep making more of a steeply depreciating coin.

And who knows when ppdefi timeline is it may take awhile

1 Like

good job! $CVP is GEMS

CVP-ETH liquidity mining can’t increase the liquidity of CVP, it should be cut down immediately

au contraire, mon ami… please elaborate.
I think it’s quite the opposite, liquidity providers should be compensated

It is not possible to migrate ASSY into PPDEFI, these products are entirely different. However, PPDEFI should be a much more efficient product in terms of zero Impermanent loss and bigger rewards.

PowerPool needs to clearly distinguish between CVP DEX pools facilitating entry/exit for xCVP stakers, strategically-coherent Power Universe pools still growing AUM/TVL like YLA, and legacy pools that, although continuing to be part of the Power Universe and managed for tokenholder yield, are expected to shrink in AUM/TVL terms over time as newer, more attractive Power Universe pools are launched.

Should we set a vote immediately?

Hi it’s already up for voting, you can find it here: https://snapshot.powerpool.finance/#/

Proposal approved!
Снимок экрана 2021-09-24 в 19.42.56

1 Like