IPT:USDC LP Velodrome Flywheel Update - IPTMan

Now that IPT is formally on the Velodrome Flywheel here is the report as I promised.

On 3/19/2024 Velodrome formally whitelisted IPT and gave us a couple gauges for IPT. What this means is that we can incentivize the pool to get veVELO votes that drive VELO emissions.

I choose to use the IPT purchased during the firesale and my own personal funds to fund the following:

Sequence of transactions that can be followed on my IPTMan.eth wallet on Optimism.

https://optimistic.etherscan.io/address/0x5fee8d7d02b0cfc08f0205ffd6d6b41877c86558

Starting with

  1. 535962.7 IPT deposit through the optimism bridge. - https://optimistic.etherscan.io/tx/0x14b9bcbe7dad33c1cbd9acded1ae9e1d8b1abbcbc124172be56df560ce6dd11c
  2. 2597 USDC transferred in from another wallet - https://optimistic.etherscan.io/tx/0xd9dcfdd58e1fd585ed96ef6babc48d4c03086cf7b619cc005b6b3dff7b154493
  3. Initialize IPT:USDC price and pool liquidity. I started small because I knew I would likely need to adjust price before adding more liquidity - 1000 IPT and 43USDC to initialize the new pool. - https://optimistic.etherscan.io/tx/0x7dc6447c318b3838718f77d8b90c841910ec935abdee74c0b64ed2f36b34dced
  4. I was happy it all worked well and even though IPT had a mainnet price of $.04 there was little buy side liquidity till about $.015 and lots of sell side liquidity above $.05. So I decided to just add more liquidity at current price of .043. - 2554 USDC with 59395 IPT - https://optimistic.etherscan.io/tx/0x16c58b4017b98b4935899c917b73c37237cddab93669bfa7ce521144de6abb11
  5. Execute a test sell of IPT to adjust price down a bit. - 1531 IPT for 64USDC - https://optimistic.etherscan.io/tx/0x935ec6d68fef4e1bec75cd827bab3b1bf955fb4ed235e14f721a08bd4314758d
  6. Transfer more cash 1786 USDC and 7053 (total 8839 USDC) to put up LP position 7117 USDC + 170850 IPT - https://optimistic.etherscan.io/tx/0x352f88622b5504876bfceaadabc7503f72e210a1b4034e3e7a6b0157dff1eda6
  7. Incentivize pool with 10K IPT - https://optimistic.etherscan.io/tx/0x5f2ada40c841903fc5a15ced3b50c9b75325fce306ce42eedf46985725dbeaf2
  8. I needed more cash to buy the VELO to make the veVELO NFT to vote with - so another 2101 USDC added and 9893 VELO purchased for 1786 USDC. - https://optimistic.etherscan.io/tx/0x346be561f2b09f447859c6a938956a2e2c603a79d95d4cd3c2d10b13db1be4b1
  9. Spent another 100USDC to buy 555 VELO - I wanted to be above 10K locked veVELO in case we got any $OP for buying and locking (there is no VELO locking reward anymore). - https://optimistic.etherscan.io/tx/0x71a848acc5c3a49bd9b145da092aa00062e312c60378a01769d896786feddf7d
  10. Locked 10448 VELO for 4 years. - https://optimistic.etherscan.io/tx/0x0f7481c34871f81b78b70f6e27d354068927295f3486877f74cb2bb16d1ae8d0
  11. Stake all the LP I had purchased above. https://optimistic.etherscan.io/tx/0x6e199b47fd62d100b8146a3c9c0d03a74bc886ee16f34a4ced8a7d69df605d90

At this point the sequence is vote the NFT - collect my share of bribes. Collect VELO rewards, swap for USDC/IPT and bribe again.

  1. Collect voting rewards - https://optimistic.etherscan.io/tx/0xd60fd7d68791ddb5e2b119d33ad9ef585f8ecdd99b69ac9a0fb85e57fe878b6e - Turns out voters picked this up and we got 420K veVELO voting for our gauge and got back 248IPT for our 10.4K voting. (this is called bribe recycling and we only got 2.48% of the 10K IPT back)

The above 420K voting drove 4674 VELO emissions to the LP holders. You can look at the sequence of transactions with that wallet. They are all basically claim VELO for the LP and sell for USDC and/or buy IPT. The idea here was to cycle the VELO earned via the LP and voting rewards back into bribes.

My net cash in (not counting cash to buy the IPT) is 13537 USDC. I still have 2K USDC to work with (trying to keep that constant) about 293K left of IPT to bribe with, and the staked LP with

8470 USDC : 265202 IPT (price .03194)

Total LP is
17023 USDC : 533013 IPT - someone I know took another LP chunk and happily collecting VELO returns on this earning around 200% APR (about .6%/day)
Wallet has
2,151.86 USDC, 293,409 IPT I bought some ETH to cover gas. Still have some GNODE in there.

So rather than continue with the tedious details I will just post the relevant protocol metrics as seen by Velodrome

I will spare everything the gory details and just go to the Velodrome analytics

The data taken from https://dune.com/0xkhmer/velodrome Velodrome protocol analytics page.

Here are the numbers:

Epoch Pool Symbol :globe_with_meridians: :dollar: :moneybag: Votes %Votes Fees Bribes Fees & Bribes %Fees & Bribes Fees APR Bribes APR Fees & Bribes APR Reward/10K $VELO Bribe ROI Bribe Tokens List
Epoch 98 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 537,659 0.05 % $ 2.8 $ 2.8 0.00 % 0.11 % 0.11 % $ 0.05 124 %
Epoch 97 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 537,659 0.05 % $ 9.2 $ 1,002.0 $ 1,011.2 0.08 % 0.37 % 39.98 % 40.35 % $ 18.81 194 % 20635.395282687186 IPT, 64.0 OP, 600.0 VELO
Epoch 96 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 520,714 0.05 % $ 2.1 $ 710.4 $ 712.5 0.07 % 0.08 % 26.48 % 26.56 % $ 13.68 264 % 5020.868955883607 GNode, 13420.711815169958 IPT, 138.0 USDC, 221.13663422174616 VELO
Epoch 95 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 420,362 0.04 % $ 473.8 $ 473.8 0.05 % 35.67 % 35.67 % $ 11.27 10000.0 IPT

Returns to IPT:USDC in terms of VELO emissions to the LP pools

Velo Emissions, $$ value and Yield APR on the LP pool

Epoch Pool Symbol :globe_with_meridians: :tractor: Emission Emission Value Yield APR
Epoch 98 vAMM-USDC/IPT :globe_with_meridians: :tractor: 5,819 $ 1,240 189.56 %
Epoch 97 vAMM-USDC/IPT :globe_with_meridians: :tractor: 5,700 $ 1,381 210.49 %
Epoch 96 vAMM-USDC/IPT :globe_with_meridians: :tractor: 4,674 $ 1,252 195.00 %
Epoch 95 vAMM-USDC/IPT :globe_with_meridians: :tractor:

So far our bribeROI above 100% (we only get 1/2 of the emissions due to only owning 1/2 the pool) so we don’t get 100% bribe recycling into VELO emissions into our wallet but we did get a 64 $OP match last epoch and 600 VELO from my friend to help with the bribe value which generates veVELO votes that drive the VELO emissions. As you can see we have pretty much maintained a slowly growing VELO emissions (value about $1.2-1.4K/week) leading to a ~200% APR on LP depending on VELO and IPT pricing.

All in all getting a very solid LP return (.6%/day isn’t bad honestly) to encourage people to pair their IPT with USDC and LP. $.031 price more due to my friend taking some profits from his cheap IPT at my expense than anything else. I am going to try to keep the bribe pool value up in the $700-1K/epoch range but this is going to cost us some IPT. I still have 293K IPT (started with 300K) so feel pretty confident we are doing quite well with using IPT value to get VELO emissions for LPrs.

We have not gotten much LP traction and people really still don’t know about the project and application on Optimism. Once we get some ability to use Velodrome CL liquidity as collateral (and stake this for our share of VELO emissions) probably a game changer on Optimism and Velodrome. We should finally get some PR and announcements from Velodrome on this which will help get us some recognition and hopefully some interest in IPT token. If we can get IPT token price up off the .03 level to something closer to .05 or even .1 10K/epoch(week) for $1K voting bribe incentives should be doable.

Once I this settles down and I have a format for weekly posts on this these posts should be much smaller.

Enjoy everyone!

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General update on the IPT bribes/incentives on Optimism.

All in all basically holding our own with respect to IPT incentives for the Velodrome IPT:USDC v2 LP I noticed that the other significant IPT holder (someone I have known for a while now) has been making rather unpredictable moves with his now 430K IPT.

IPT price has mostly held the .03 - .04 USD/IPT range. Incentive rewards have been giving LPrs returns as high at 1%/day (365% APR) and currently 240%. Pretty much taking the VELO rewards for my delegate wallet LP and just buying back IPT in effect selling IPT for the VELO LP emissions.

Last epoch cost for VELO emissions hit a pretty high mark due to the fees generated from the SONNE hack. I was going to push for soUSDC to be added to IP, but everyone would have taken a loss there. Shows how much care needs to be taken when adding assets to the protocol (even ones that looks safe from a price/risk perspective).

Last week bribed approximately 40K IPT, got another 103 OP in matching incentives giving us a bribe/fee vAPR of around 50%, even so this wasn’t sufficient to keep emissions at the same level.

Epoch Pool Symbol :globe_with_meridians: TVL Volume Swap Fees # Swap
Epoch 95 vAMM-USDC/IPT :globe_with_meridians: $ 20,624 $ 794 $ 2 4
Epoch 96 vAMM-USDC/IPT :globe_with_meridians: $ 33,394 $ 2,978 $ 9 16
Epoch 97 vAMM-USDC/IPT :globe_with_meridians: $ 34,129 $ 919 $ 3 16
Epoch 98 vAMM-USDC/IPT :globe_with_meridians: $ 34,404 $ 1,248 $ 4 16
Epoch 99 vAMM-USDC/IPT :globe_with_meridians: $ 39,884 $ 3,096 $ 9 30
Epoch 101 vAMM-USDC/IPT :globe_with_meridians: $ 38,856 $ 1,026 $ 3 19
Epoch 102 vAMM-USDC/IPT :globe_with_meridians: $ 24,529 $ 2,161 $ 6 61
Epoch 103 vAMM-USDC/IPT :globe_with_meridians: $ 40,979 $ 7,239 $ 22 90
Epoch 104 vAMM-USDC/IPT :globe_with_meridians: $ 38,443 $ 6,325 $ 19 38

TVL generally flat to increasing with minor exception(s) Epoch 102. swaps increasing and number of holders up to 87 and increasing slowly, though IPT held or LP’d isn’t.

https://optimistic.etherscan.io/token/0xa211e25f7246950e0cce054e3161c7c0b6379485#balances

Bribe ROI decreasing somewhat but number of votes increasing as I ramp up IPT bribes to 40K. SInce we get decent IPT bribe to VELO emission recycling it makes sense to basically distribute IPT to voters in exchange for VELO emissions.

Protocol RevenueVelodrome - Pool

Epoch Pool Symbol :globe_with_meridians: :dollar: :moneybag: Votes %Votes Fees Bribes Fees & Bribes %Fees & Bribes Fees APR Bribes APR Fees & Bribes APR Reward/10K $VELO Bribe ROI Bribe Tokens List
Epoch 103 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 1,334,138 0.13 % $ 7.2 $ 1,901.9 $ 1,909.1 0.17 % 0.20 % 53.16 % 53.36 % $ 14.31 213 % 40000.0 IPT, 103.576308442658 OP
Epoch 102 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 1,880,683 0.19 % $ 3.1 $ 1,254.0 $ 1,257.1 0.19 % 0.07 % 27.03 % 27.09 % $ 6.68 135 % 35000.0 IPT, 83.498389391748 OP
Epoch 101 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 1,314,274 0.13 % $ 12.7 $ 1,280.3 $ 1,293.0 0.15 % 0.33 % 33.29 % 33.62 % $ 9.84 201 % 40000.77359535374 IPT, 43.0 OP
Epoch 100 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 1,216,676 0.12 % $ 9.2 $ 960.2 $ 969.3 0.14 % 0.28 % 29.67 % 29.95 % $ 7.97 111 % 20574.684035198236 IPT, 71.0 OP, 100.0 USDC
Epoch 99 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 1,015,063 0.10 % $ 4.0 $ 1,332.2 $ 1,336.2 0.14 % 0.11 % 35.66 % 35.77 % $ 13.16 231 % 21438.965462278935 IPT, 79.0 OP, 200.0 USDC, 1000.0 VELO
Epoch 104 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 1,334,844 0.13 % $ 25.7 $ 25.7 0.01 % 0.74 % 0.74 % $ 0.19 96 %
Epoch 98 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 971,279 0.10 % $ 2.7 $ 859.8 $ 862.5 0.13 % 0.08 % 24.74 % 24.82 % $ 8.88 108 % 23408.49 IPT, 56.0 OP
Epoch 97 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 537,659 0.05 % $ 9.2 $ 1,002.0 $ 1,011.2 0.08 % 0.37 % 39.98 % 40.35 % $ 18.81 194 % 20635.395282687186 IPT, 64.0 OP, 600.0 VELO
Epoch 96 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 520,714 0.05 % $ 2.1 $ 710.4 $ 712.5 0.07 % 0.08 % 26.48 % 26.56 % $ 13.68 264 % 5020.868955883607 GNode, 13420.711815169958 IPT, 138.0 USDC, 221.13663422174616 VELO
Epoch 95 vAMM-USDC/IPT :globe_with_meridians: :dollar: :moneybag: 420,362 0.04 % $ 473.8 $ 473.8 0.05 % 35.67 % 35.67 % $ 11.27 10000.0 IPT

So far my delegate wallet holds about 498K IPT (147K in wallet, 351K paired with 12,400 USDC in the LP). When the 0x8622… wallet exited their LP I paired the last 2K of USDC with more IPT.

Provided protocol fees and bribes return to normal we should get a boost in emissions next epoch for similar bribe level. We also should get a decent boost in $OP matching bribes. NOTE: BribeROI includes the $OP matching so our actual bribeROI is higher than the one listed above due to the velodrome $OP matches.

If bribesROI excluding matching $OP drops below 100% I will reconsider the level of bribe voting incentives but as long as they stay above 100% will continue to recycle LP VELO emissions into IPT buys to recycle the rewards. I would like to build up a veVELO position here but until IPT price appreciates significantly or some other finances are provided it simply doesn’t make sense. Loosely speaking a veNFT could be purchased at 30-45% discount to market that could sustain emissions indefinitely. (a 1M veVELO can direct up to 1.5-2K worth of VELO emissions/week to a LP). If we had the community funds I would suggest doing it because the ROI on such a beast is approximately 50%/yr at this point.

Final notes as I have been watching with interest the switchover of fees from v2 positions to concentrated liquidity positions as well as the total economics of Velodrome. Not entirely clear this is long term sustainable. But for now the idea of swapping IPT for VELO emissions is appealing because the bribeROI is still > 100%

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