IPT Reward Proposal
Using this space to put some thoughts into a formal setting for discussion. Most ideas are strong opinions weakly held.
Current Reward Distribution
Nekosan has created a proposal post to pause reward distribution.
Proposed Alternatives
I would like to lay out a few different designs that I believe could be useful to help grow the token and accrue value to the IPT token. First, I’d like to get rid of the idea that we should hire a third party market maker to provide IPT liquidity. This seems relatively risky as it could still be viewed as Governance/GFX attempting to set a price for IPT.
I’m still somewhat torn here though, as it’s hard to make a token worth something when there is not enough liquidity in the market to make holders place significant value on it. (Shoutout IPTman for helping to remedy this).
At the end of the day the most effective way to accrue value to IPT is to accrue value to the protocol, giving each IPT governance over a greater value of collateral.
Partnerships
Over the last several months we have seen a market explosion of ve-style governance tokens where holders get to direct emissions of the token. This vote-escrow mechanism, where tokens are locked for a certain duration of time & voting power a weighted average of lock time & quantity, allows protocol governance to direct liquidity to pools that optimize the combination of fees and bribes received by veVELO holders.
Homage here to IPTman’s discord message found here (Discord). If governance had access to a portion of USDC/USDi then we could use $50-60k to direct 10,000 VELO/week to any LP pool. If we decide to put $10k USDi & 300k IPT into the pool ang got a 1:1 match governance would earn half the bribes or ~5k/week which could be rolled back into further pool bribes or building a larger veVELO position.
Please feel free to check the math on this.
Personally, I’m a big fan of this idea for a couple reasons. First being that the IPT liquidity would give some value to the IPT rewards that can then be used to incentivize liquidity in various places at the protocol and LP level. Second being that Velodrome is the biggest exchange on OP, so having a pool with significant bribes would being a lot of organic interest/attention to IP as a protocol.
Bounties
Bounties should be distributed to significant contributors. If someone helps create a proposal call, provides a valuable service such as an executed partnership, or brings in a significant amount of liquidity by engaging with whales, there should be some IPT reward distributed to them. As we pay Feems to run the delegate program, there is plenty of opportunity for other such programs.
A nice example of what I am envisioning was recently implemented by Frax. Details can be found here. Announcing The Frax Educational Incentives Kick-Off
Frax has allocated ~$30k USD over 3 months to the program. The reward will be paid in $FXS tokens. While it would be nice if IP could implement something of the sort, it is dependent on a market for IPT. It’s very hard to decide on a token allocation when there isn’t a real price attributable to the token.
Overall this type of program is dependent on some sort of market for IPT. It is unlikely that we get meaningful contributions if we cannot reward contribution with meaningful value.