Future Roadmap Proposals

Part 1.

What we have:

  • A concept transcending general market trends, short-sighted speculation or clout-chasing. Money markets are here to stay. Community-ownership is the most powerful drive behind it. I would argue we are best positioned out of all projects to prove it.

  • A developer who is decent and transparent. They proved multiple time already that they are not going to take advantage of the community. On the flipside we all witnessed the shortcomings of there being just 1 person behind the tech.

  • Engaged, thoughtful community of only the strong-hand-type people – all bullish on the concept and appreciative of our developer’s dedication to bringing it to life.

All 3 elements combine into a massive opportunity where it’s 100% on us to build what is the corner stone of financial freedom worldwide.

What we lack:

  • A set of goals and a roadmap that we can agree on as a community.

  • A dedicated team, “hired” and monitored by the community to make this roadmap a reality.

  • A clear utility of the token to facilitate the roadmap and organize an even tighter, yet much wider community. In other words, a clear path to value accretion.

Part 2

Having taken into consideration all discussions held here, circumstances of token bootstrapping to date and the product’s launch I have the following set of short-, mid- and long-term proposals. It follows a top-down approach.

The Protocol’s End Goal:
A truly community-driven permissionless global money market. This means that we leverage the “wisdom and strength of the crowd” to build an application and underlying protocol to facilitate access to/provision of any asset on a blockchain (subject to conditions).

To anyone. Anywhere in the world. 24/7.

Using it should be seamless and intuitive. Mobile-friendly, cost- and time-efficient.

The Protocol’s Mid-Term Goal:

Our project needs to have a variety of products to fully cover any money market-related needs of its users.

There needs to be an established procedure protocol for community to vigilantly respond to new market needs and propose these features in an easy and transparent way. The voted in proposals should be streamlined for implementation by the dev team and helped with by the community (testing, bug-hunting etc.)

We need to have an easy-to-use and secure mobile app (non-custodial) to access the protocol, integrated with custodial wallets (including CEXes), fiat on- and off-ramps, broader fintech apps and other decentralized protocols.

The Protocol’s Short-Term Goals

A. We need to have a set of distinctive initial products to offer to users that would drive adoption without relying on incentives (YFI comes as a prime example of this).

My list on product ideas (includes ideas others have proposed in Discord):

  1. Un- or under-collateralized loans for only PCT holders akin to a credit union (check https://beta.union.finance/ for a rough reference).

  2. Ability to wrap each debt position into an NFT in order for holders to be able to trade them on NFT marketplaces (e.g. Rarible), or even allow them to be bundled into ERC1155 akin to CDO-type financial instruments trading of which has embedded “creator fee” for Percent (also doable on Rarible from what I understand, but could alternatively be a 1-time creation fee).

  3. Gas-subsidised bundling of user transactions: say, not everyone is in a rush to get or pay off their loans – they can allow the protocol to bundle their txs with others 1-2 times per day when the gas prices are lowest.

  4. Integration with asset-managing solutions (Zapper, Zerion etc.).

  5. Start working on the mobile app. How to mitigate the issue of the protocol accessibility via mobile (needs tech proofing):

  • Percent can take a form of a dapplet (i.e. a mini-app that works inside other apps) that can leverage other custodial solutions. Potential candidate for such integration is Status (it’s like WeChat for Ethereum, if you know what that means), which is basically an Ethereum wallet+browser. They are great, but currently striving for adoption. Could be a win-win.

  • We can provide our own smart contract wallet (think Argent/Fortmatic) + maybe even go as far as to subsidize transactions (I have a few ideas, will lay out separately) = so that the UX is very seamless and traditional fintech app-like

  • We can integrate with a wallet solution. The only one I can think of off the top of my head that could be open to that would be Maskbook, because they have very similar values. If you haven’t tried this product, go do it, it will blow your mind.

    This number 5) item is the most time and effort-consuming, but just by announcing and progressing it as we go we can drive a lot of interest in our project IMO.

  1. Overall, more aggressive parameters on collateralization to bring in higher/lower % for users and make the protocol more naturally competitive. We would need a dedicated research into financial parameters of asset types offered on the platform to determine this.

  2. Ability to quickly list otherwise underrepresented tokens with strong enough communities and fundamentals by pro-actively engaging with Chainlink on this as a fast growing user of those oracles. Something to research – ability to use established NFTs (e.g. Wrapped Punks) as collateral based on their most recent market price.

B. We need to figure out token economics in such a way that encourages participation in the protocol and lessens concentration in the hands of a few – that’s how we grow the protocol to a truly multi-bn cap asset (think LINK-type distribution) . Another important consideration is that we don’t run a legal risk of being classified as a publicly traded equity. Those are real, see my comments here for more context: https://discord.com/channels/756024964448256011/756493771973197844/762384425538420776 - and scroll.

My list on token economics:

  1. Given my proposals re/product, we can partially (or even completely) abolish liquidity mining for the use of Percent. Instead we can put much (or all) of the 4m Phase3 rewards aside for people we need to “hire”–whom we desperately need, but currently lack in the community (think stock options in a startup).I come to realize that it’s only devs that we really need to incentivise. We can also keep incentivizing the Balancer pools and add Uni PCT pool, distributing 100% of Phase 3 BAL rewards to also cover the costs of hires. Protocol reserve also needs to be 100% used for dev remuneration,at least in the years 1 and 2.We can create value accretion mechanisms for PCT that circumvent direct reserve distribution. We need best devs in a competitive market,no amount is too high.

  2. We need to create incentives to use PCT inside the protocol like: reduced fees (significantly reduced),gas-subsidies (check A.3 above);ability to have uncollateralized or undercollateralized loans (check A.1); mint NFTs of loan positions etc.

  3. Certain thresholds of ownership of PCT will get user a 30%/50%/100% discount on any protocol fees. Basically,starting from a certain amount of PCT you get to use the protocol for free (which could include gas fees if you use what’s proposed in A.3) and also govern it. On the face of it, this should equate economic value of protocol “revenue” to the token price. Needs more research.

C. We need to create an execution team, which is evaluated regularly based on merit by other PCT holders via governance to incentivize value-add rather than time-spent-in-the-community behavior and keeps everyone at their A-game. Thus, a community can always “fire” team members if they find their work non-value-additive to the protocol.

My list on the team:

  1. Dev team is crucial. We can fund them with BAL rewards from Phase 3, PCT and protocol reserve on an on-going basis. Devs can choose, which way they want to get paid. The more PCT a dev chooses as their reward the less often/by less parameters (TBD) they are evaluated by the community.

  2. Marketing, community building, product/strategy (at least initially until protocol reserve grows) should be done by current holders without explicit rewards from the protocol, but with valuable perks within the community (extra voting power, less often evaluated by the community etc – TBD as well). We are incentivized enough by the potential token upside and we all know it is massive at current prices. Devs are more important to incentivize and we don’t have many options at this stage.

  3. We need to pass all admin roles to a multi-sig with the ability to rotate the signatures according to the changes in the execution team as soon as the first complete team is formed (needs tech proofing).

  4. The dev team would also need to create a dedicated GitHub repo to coordinate code-related activities there and nominate one of them to report progress to the community in a non-technical way on a weekly/monthly basis.

Part 3

Immediate Action Items

  1. The governance-dedicated portal is up.

  2. Let’s peek rough consensus on the long- and mid-term goals here in the next 2 days and adjust/add/finalize it by Wednesday and publish it via a Medium post. I would like to kindly ask @CliveSpader to moderate it and finalize the outcome.

  3. Concurrently let’s work on the short-term goals via the newly setup forum page within the dedicated discussions and finalize rough consensus via post/reply approval voting in the forum by Friday, Oct 9. Let’s publish a separate dedicated Medium post about it and announce our 2nd protocol vote (see below).

  4. Following Friday let’s hold a 48h vote over the weekend on Phase 3 distributions and use of BAL rewards and protocol rewards moving forward, based on short-term goals. Again, if we roughly figure out cool protocol ideas and how to implement them over this week, given the current token price I don’t see why we can completely get rid of incentivizing protocol use with PCT, saving valuable upside for dev incentives. We need to allow PCT-based voting, rather than staked PCT(BPT)-only.

  5. Following the vote, lets post the “job listings” for devs and form an execution team of non-dev (i.e. non-paid) community members via forum and decide on their respective responsibilities until the first merit-voting.

  6. Let’s pass the admin to the multi-sig of the first execution team members, expanding it as we go along with dev additions

  7. MOON :100:

Finally, I would like to clarify that I want @PercentFinance to keep 100% of Phases 1 and 2 BAL rewards. They deserve it for everything they’ve done (and not done, thankfully) over these few weeks. It will allow us to evaluate them on an equal footing with other devs in our merit-based system and allow them to safely continue working on the protocol without worrying about financial risks. I think it’s a win-win for us.

I expect everyone here to support this.

2 Likes

Thanks for writing such a detailed post. Maybe I am misunderstanding something but I do not see where the UNI rewards would come from? The only pools that are UNI incentivized at the moment are ETH/WBTC+ETH/stablecoins and it is not changing in the near future. This is probably why @PercentFinance chose Balancer.
Moreover the BAL rewards for phase 3 will only come from the WETH/PCT pool, which has very little liquidity (rewards are proportional to liquidity). All in all the dev fund will amount to almost nothing.

Honestly I am extremely grateful to @PercentFinance and I sincerely believe that he is our biggest asset but leaving him with the full bal rewards for phase 1 and phase 2 would jeopardize the future of the project. I am sure @PercentFinance would like to see the project thrive and I hope that we can come to an agreement that makes more sense.

Ok. There are a lot of amazing ideas in here @Vaspou. In my view what would be most helpful is if we initially use this thread to focus on defining some short-term goals for October. Many of these are listed in your section on “immediate action items.” What I think needs to get done ASAP is the following:

  1. Initiate a discussion here about what to do with the remaining PCT rewards, with the vote to be held over the weekend on snapshot, based on PCT-WETH BPTs as with our first one. In principle, as of the start of phase three (October 14th), I would be for splitting the rewards between incentivising PCT/ETH pools for token liquidity on Balancer and Uniswap, and dev funds. I find @Vaspou 's argument convincing that we can build a great product and users will come without needing to pay them to borrow/lend (using YFI as an inspiration).

  2. Set up a multi-sig for unpaid execution team members. The Zuniswap team is offering their help if our dev wants their feedback on how to do this in the best way possible. See #marketing channel on the Discord for that.

Once those are dealt with, we can move on to:

a) Getting some development help for our dev. Two people seems reasonable to me (again in the immediate term, just given we aren’t working with a load of funds), either both full stack, or split between front end/UI (which we need to work on) and back end.

b) A deep dive on tokenomics stuff, which should have its own thread. I will make one and post it to the Discord for people.

c) Taking advantage of the DeFi ecosystem by integrating with DeFi pulse, Zapper, Zerion…as well as making use of partnerships that are low-hanging fruit (i.e. YFV, Zuniswap).

d) I think if we aim to add five tokens agin this month it shows we mean business. I will start a new thread on that as well. As we wait to figure out the Chainlink listing process we can just select five more that they already have price feeds for here:

@brisket for the UNI pool, we mean using PCT to incent people to have a PCT/ETH pool, not having Uniswap incent PCT for us. And @brisket I would have ideally wanted to see @PercentFinance seed the multi-sig with some small amount of funds like $20,000 to help pay for some initial dev help while we get momentum, but we have to work with what we have. He has done a good job so far an he will keep building.

Just to add some concrete numbers. BAL apy for the pool is 35%. With 1M of liquidity in the WETH/PCT pool for phase 3, we’ll end up with about 7K per week for the dev fund which seems ok. If 100K is left due to the decrease in incentives then it will be $700 which is not enough. Unfortunately we are going from 7M PCT over 2 weeks to 3M PCT over 1 year and we need to incentivize the pool to the tune of at the very least 50% APY to have it makes sense (current APY being 450%).
At current price even if we were to not incentivize lending/borrowing at all and with the minimum 50% apy (not realistic for incentives) for the pool we would get 480K in the pool. The math just do not add up if the price of PCT does not increase by several hundred percents quickly.

I would like to add that the original medium post said:
‘‘All BAL rewards from Balancer will be used to subsidize dev cost, this allows the team to continue the development while still keeping the project 100% community owned.’’

Having the only dev cash out all the rewards after four weeks does not fulfill this vision. @PercentFinance as I said, we are all incredibly grateful for your work and motivated to move the project forward but please provide us with the means to do so. Once the project can run on its own I am all for rewarding you handsomely for your great work.

I’d like to voice support for keeping supply/borrow PCT incentives. Especially now that cream has ended these it is an opportunity to build up TVL which will help bring exposure to the project. Also, with such a low market cap token increases in value create a positive feedback loop as the value of incentives increases. Of course that works the other way so you need to be careful with this if/once the token value increases. I also think it just makes sense to distribute the token to the real users of the protocol on an ongoing basis - it’s appropriate that they have a say in return for their participation and the value they provide.

@brisket @CliveSpader @Spartacus thank you for you thoughtful comments.

I think the very first thing we need to figure out is how to sustain future development and maintenance.

Here are my thoughts:

  1. While the recent comment by @Spartacus makes sense, i’m not sure we need to incentivise the use of the protocol. A regular protocol LP/borrower’s relative rewards are already pretty small (and will become even smaller in a couple of days - so we will be able to test my assumption), yet we’re hovering around $20-25m at the time of writing. I’d argue that if we build initial competitive moat around quickly adding new tokens Compund, Cream or Aave don’t have + increase collateral factors 5-10% in comparison to them (for example increasing collateral factor for USDC from 75% to 85% totally makes sense), we can be sure to maintain that pace.
    Additionally, if we just make the UI more intuitive to a layman and secure wallet integrations, so that DeFI APYs can be offered to regular folk via crypto wallets (i’m working on a couple and hope others can help - just DM me if you can help), we’ll be fine. I’d elaborate on it later, as we first need to figure out the pressing issues.
    If many people here disagree we can set up a quick vote on this - to make sure there is firm consensus on the path forward.

  2. @brisket is right to point out the quote from the original Medium article. However, having carefully reviewed @PercentFinance’s responses to the discussions around this subject on Discord i came to realise that they were and are still looking to maintain the protocol on their own and supply themself mainly from the BAL rewards. They’ve done a good job on the UI, have been decent and transparent all along. I think their vision is simple and pretty powerful - community offers token suggestions and UI/UX improvement proposals and they implement it. So they are not breaking their own word, expressed in that Medium post. It’s just that some of us here, myself included, are more ambitious about what we want Percent to become and maybe it should be on us…
    Also lets be fair - they fully give up Phase III BAL rewards.

  3. ^ It’s all fine be me as long as @PercentFinance transitions the contract ownership to the initial exec team multi-sig. I suggest we initiate a vote on it before we decide the Phase III rewards distribution, as the part of that PCT pool would need to be controlled by the multi-sig. See paragraph 7. below

  4. I think we need to change the BAL pool from 50/50 to 10/90 or 20/80 (PCT/WETH) to incentivise more participation, which will end up in more BAL rewards. I believe they also have pools with transitioning weights - not sure if they can be used for non token-offerings, but maybe someone can advise. So we can deploy a new pool starting in Phase III

  5. @Brisket is right - i forgot that Uniswap incentivises like 4 major pools only. So yes, this means we can only count on BAL rewards and protocol reserves to sustain additional devs.

  6. Finally on protocol reserves. Current reserve factors:

  • pETH: 10% (= Compound’s)
  • pUSDC: 5% (= Compound’s)
  • pUSDT: 20% (= Compound’s)
  • pDAI: 5% (= Compound’s)
  • pWBTC: 10% (= Compound’s)
  • pLINK: 40% (= Cream’s)
  • pYFI: 40% (= Cream’s)
  • pSNX: 40%
    A very inaccurate calculation given $20m in locked funds + at 5% average APY across all assets and average 10% reserve factor, i.e. 0.5% protocol “fee” gives us $100k a year. Ideally, we can extrapolate current markets and weighted average and calculate more accurately - should be quick, hope someone can do it.
    But it provides a rough ballpark of what we could be dealing with at the worst. This isn’t much, especially given that there’s also pressure from some community members to distribute portion of the revenues to token holders (i would address this after we resolve the financing and hiring, hope others agree)
  1. Out of 3m PCT in Phase III, i think we need to provide 1m for team incentives (subject to vesting, merit-based community voting etc.) and divide the remaining 2m equally between Balancer and UNI. This is a rough approach, maybe someone can provide a more well-calculated division of those rewards.

  2. We might also end up using the team’s allocation for other purposes we deem necessary by a vote, with the execution team controlling them via multi-sig. For example if we end up attracting Fair Launch Capital (prob. unlikely, but an option, see here - https://twitter.com/fairlaunchcap/status/1298670548453453826?s=20). Any of these funds should be allocated only as a result of voting.

  3. There’s a chance PCT holders might get additional liquidity mining rewards from other protocols like what’s been discussed around YFV - e.g. VALUE for running a PCT/USDC pool on their DEX. I’d hope we have more of those as we grow as a community, but that should remain personal and specific to each PCT holder’s risk-reward estimation and we should not use the protocol’s remaining PCT rewards for that.

Given these very rough considerations we can expect the first year budget to be at least around $150-200k. I think it’s enough to attract additional talent to better the product. So we can pay additional devs on an on-going basis and via PCT allocations.

So if people agree with my logic above (please signal by commenting or liking) let’s first vote on the multi-sig transition, then determine the rough short-term roadmap and the people to hire. After we do that we will have more clear vision on how much spend we would need to vote over the Phase III reward distribution.

These are all immediate actions.

Yes, fair point, there is already usage/tvl despite relatively low supply/borrow rewards and I agree priority should be on adding tokens + more competitive collateral factors. Still I personally support the idea of rewarding usage with governance influence - this is more of a general preference across defi and dapps generally.

I would suggest funding dev, and even specific improvements, more directly rather than through the BAL rewards. Additionally I don’t see the value in rewarding LPs with PCT - this seems like a waste of the war chest. LPs can be better incentivised with a higher tx fee and rebalancing to reduce IL. The market cap right now is very low and people who buy are taking a moon shot. They don’t care so much, relatively, about tx fee as this is dwarfed by potential gains. The real issue is eating the IL when/if the project is successful and the token value goes up. Don’t spend the PCT on LP rewards when traders can pay for this incentive themselves.

I really do not like the role I am playing here but I have to ask the tough questions. If we are going for " community offers token suggestions and UI/UX improvement proposals and @PercentFinance implement it." and all the rewards are already available to him/them. How do we ensure that he/they keep their commitment to the platform over time?
This is a very common problem for early-stage projects.

Contrary to you, I think that it is more important at this stage to reward usage of the platform than liquidity of the token. I would advice to distribute 80% of phase 3 tokens to users and keep 20% as vested incentives for developpers. Liquidity will naturally come with speculation if the project is successful. Plus from a conceptual point of view, the initial idea behind governance tokens was to have users participate in the platform.

2 Likes

Thanks @Vaspou ! Just want to share some thoughts and provide some more information:

  1. Really appreciate your work and support
  2. I’ll fully support the transition to multi sig
  3. In point 4, you said to change the pool ratio from 50/50 to 10/90 or 20/80 in order to increase BAL rewards, while this is possible, please also be reminded the ratioFactor in their BAL reward calculation. Basically, the more even the ratio is, the more BAL rewards they will give. More info
  4. Regarding the Value Liquid pool, we can decide what pair to have, it can be for example PCT/USDC or PCT/WETH, the ratio can be for example 90/10, 50/50 or 10/90, these can all be considered.
    Also, we can also potentially use this pool to generate income for our project growth, for example we may put some of our remaining PCT to the pool and get VALUE to fund new devs, but obviously it depends on what deal we end up with them and how much VALUE incentives they are willing to give.
1 Like

+1 Using remaining PCT in a pool to earn funds. May as well have these funds working for the project. I think it would important, then, to switch to a bullish pool ratio maybe even as extreme as the 90/10 (PCT/WETH). Also increase fees - people buying PCT are not, right now, so concerned with these fees but they can make a substantial difference to what the LP earns over time. Using remaining PCT is a great way to earn funds and also provide the liquidity needed without rewarding LPs with PCT directly.

Ok, so i gather both of you @Spartacus and @brisket agree on incentivizing the use of the protocol - definitely an item to consider.

@Spartacus regarding your other comment - sounds valid and i personally incline to think along the same lines, the issue though comes from how to fund the team and BAL rewards seem to be a feasible option. i believe that in order to make it more accurate someone needs to calculate exact protocol reserves by extrapolating current liquidity conditions (taking it as a base scenario). i might do it tomorrow, but unfortunatelly will be tied up in the next few hours, which are the day’s end (European timezone).

@brisket the fact of the matter is we already are in this situation from the very launch of the Phase I, where we need to trust @PercentFinance. The crux of my proposals is precisely about eliminating this risk.

@PercentFinance thanks for your input on the Balancer pool rewards. Will need to study it better.
Generally if we end up leaning towards liquidity incentivization, maybe considering YFV also makes sense - i have given my opinion though.

@Spartacus can kindly you elaborate more on your last idea? not sure i completely get it

Absolutely. It’s not something I had considered - the suggestion was from @PercentFinance to provide liquidity to a balancer pool with the remaining PCT. My initial take is that this is a great idea that could even solve a few issues at the same time. Rather than pay out PCT to LPs to incentivise liquidity, just provide that liquidity directly and keep the PCT. One issue arises in that if PCT value goes up (we want and expect this) then being an LP means the project can incur impermanent loss. If it goes up say 30% not such a big deal, but if it triples, like it will, then the loss can be significant and unlikely to be recouped from tx fees. Here is some javascript that demonstrates this: function iLoss(ratio){return 2 * Math.sqrt(ratio) / (1+ratio) - 1}. Hit f12, paste that in console and if you then type iLoss(1.3) (PCT increases 30%) it returns -0.0084 (0.8% loss) or iLoss(3) (PCT triples) it returns -0.134 (13.4% loss). PCT will (more than) triple so we don’t want the project to lose that 13.4% of value. To mitigate against this we can use a balancer bullish pool where the token pair is not evenly weighted but skewed towards 1 of the tokens. The greater the skew the less IL will be incurred by LPs. There is a helpful chart in the Impermanent Loss section of that article. A bullish pool, say 90/10, would also be much easier for the project to enter with it’s remaining PCT as it still needs to come up with the paired token (WETH) and in the case of a 90/10 pool this is much less.

Balancer also supports choosing your own tx fee (unlike uniswap which is set at 0.3% for all pools). I would suggest we go aggressive on this on the basis that 1) this is likely the only pool that will have sufficient liquidity at least for now so traders/buyers don’t have much option, and 2) because the token value right now is low interested buyers are likely long and looking for major long term gains and a few basis points won’t be an issue to them, and 3) if you aren’t long and just trading in/out then well who cares pay the fee and help fund the project :slight_smile:. A super rough calculation based on continued ~$150k/day volume, at say a 1% tx fee, then that’s $1.5k/day which the project would largely earn because the liquidity it provides would dominate the pool. While the income strategy does compare to the current income (though it looks like it’s more just not greatly more) from the BAL apy I’d argue it does solves the issue of having liquidity, provides a reasonably steady income stream that compares to the current, incentivised, BAL reward income, and without actually giving up the PCT.

The “reserves” are generated by diverting some of the interest paid by borrowers away from suppliers. For example, if the reserve factor is 10%, then 90% of the borrower interest goes to suppliers and 10% goes into the liquidity pool. Under normal conditions, this means that over time the liquidity pool grows to be larger than the sum of obligations to suppliers.

One motivation for this is to protect suppliers against failures in the liquidation system. For example, if prices change too rapidly or if the liquidation incentive is too small, it may happen that no liquidator chooses to repay a borrower’s debt before that borrower becomes insolvent. Since an insolvent borrower is expected to simply forfeit the collateral and keep the more valuable borrowed asset, this can result in a liquidity pool without enough assets to meets its supplier obligations. The idea of the reserves is to provide a buffer against this.

However, I have criticized the Compound system of reserves as being much too small to have significant protective power. In any “success scenario”, the assets supplied to the system increase over the next 5 years at a pretty high rate. Starting at $20M, I would hope to see increases of several hundred percent in the first year at least. Under this scenario of asset growth, the total size of the reserves is always a tiny fraction of the liquidity pool. Yes, the reserves could cover a tiny deficit due to liquidation failures, but the same would be achieved with a tiny haircut to suppliers. So the protective benefit provided by the reserves is insignificant.

That means we should consider other uses of the reserves. To summarize the options, we have:

  1. Leave the reserves in the liquidity pool, where they can protect suppliers from a very small loss.

  2. Remove the reserves from the liquidity pool and use them to pay developers, as proposed by Vaspou above.

  3. Remove the reserves from the liquidity pool and use them to reward PCT holders. For example, the funds could be used to buy PCT on the open market and add it back into the reservoir for future distribution via the normal reward mechanism.

  4. Other?

1 Like

This was very useful, thanks for clarifying. Basically we talk about almost the same thing - i.e. a bullish pool with skewed weights, but instead of incentivising it, providing liquidity ourselves. I really like it on the surface, would probably need to think deeper to make sure i get all the potential risks.

Do you think it implies leaving PCT control to the multisig that can then divert the funds as they see fit (for example if we decide IL is too big or, say want to incentivise devs and would reduce our pool stake any other reason)?

1 Like

Yes, I guess I was lacking that breakdown, thank you!

  1. There could be an option to reduce reserve factor to compete more aggressively on pricing. But i believe in our circumstances it is at least 1 year away, even if we use the creative BAL pool suggestion by @PercentFinance and @spartacus. We need those funds to secure the future growth of the protocol

Do you think it implies leaving PCT control to the multisig that can then divert the funds as they see fit (for example if we decide IL is too big or, say want to incentivise devs and would reduce our pool stake any other reason)?

You could make an interface such that it’s operable via governance but in practise, at least in the short-medium term, I would say yes let the multisig handle it. Longer term the strategy may change anyway so I would say cross that bridge when we come to it.

@Spartacus When you say “operable via governance” do you mean something like what Compound is doing? i thought we can start transitory with the execution team for moving faster, yet representing community and then look at the options we have. Ideally we’d need a fairly large distribution so that the process is Banhzaf-secure (read more on this here: https://blog.coinfund.io/are-blockchain-voters-dummies-4a89a376de69?gi=b33d3b29336b)

if we can have a multi-sig that supports rotation, expansion/contraction of the signers this could be combined with the merit-based evaluation by the community. should work in the beginning. would need @PercentFinance to confirm that it’s doable

Hey everyone, these are really great ideas. After reading through everything, here are my two cents:

a) I am for having a multi-sig in the way that @Vaspou describes. One that “supports rotation, expansion/contraction of the signers” and is responsible to merit-based evaluation

b) I am for the idea of putting our PCT “treasury” in an aggressive Balancer pool. This is what Fernando and the team hoped different projects would use Balancer for, so I totally support @Spartacus and @PercentFinance on that. Something like 90/10 with a 1% fee would make sense to me. It also makes sense to have these funds (and the BAL rewards associated) be controlled by the multi-sig executive so they can adapt to changing strategies as the project moves forward/ pay bounties, etc. I think the BAL rewards, the high fee, and the aggressive weighting are good enough counterweights to the potential for impermanent loss, though I am open to dissenting thoughts.

c) To thread the needle here on different views, I think we should take whatever PCT we have as of phase two ending on the 14th and split it, putting half into our treasury fund on Balancer and allocating half for liquidity providers (which further would be shared 50/50 between incentivizing just one pool [BAL or UNI] as well as lenders/borrowers in a small way for one year).

d) To accomplish this I think we should have two votes over the weekend that are open to both BPT holders for the current PCT/WETH pool as well as PCT token holders themselves using quadratic voting. One vote on the transition to the multi-sig, one vote on the allocation of the rest of our PCT. The idea of hires and identifying other people who can help in the short-term can be decided on by rough consensus thereafter.

I think something no one is discussing, and should be looked at, is dev is a single point of failure in the entire project, and we should consider that going forward with new hires and so on. If something happens to him the project dies. So I think getting him some help asap and up to speed with the codebase/front end stuff should be a top priority rather than just relying on him to do all the work… having a centralized point of failure in a decentralized platform… is probably not the best way forward. I will add i trust dev 100%, so its not a trust issue, its just a shit happens issue i guess

@madness this is precisely what we’re talking about as immediate goals - i.e. figure out how we finance other devs joining the team and transition to multisig to mitigate any single-point-of-failure risks.

@CliveSpader i believe your points in c) slightly contradict those in b). Please consider this great explanation by @Spartacus just here above: Future Roadmap Proposals
Basically there is no need to continue having a PCT/WETH pool if we run a new one instead. I’d only argue that we should consider not only a 20/80 or 10/90 weights, but also weights that change over time (i believe Balancer allows for that if i’m not mistaken).

Love your 1% idea, need to think about it a bit to confirm my support.

Also, if we incentivize a UNI pool concurrently we’ll be eating into our own returns, as 0.3% fee will divert all interest from our Balancer pool.

So i guess if we go with that strategy, we should focus on 1 pool only and provide hella liquidity so people go there.

One more comment if i may @CliveSpader, just to make clear for the rest of ppl reading here, as i’m sure that’s what you implied: when you say the execution team controls the multisig and can change strategy of allocating treasury funds you mean based on how the rest of the community votes on it, right?

I agree that we should have 2 votes before Phase III, but we can prob have them back-to-back rather than concurrently and maybe start before the weekend. My question here would be to @PercentFinance - can we quickly change the Snapshot settings to accept both pool tokens and PCT? And can we also implement quadratic voting quickly?

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