Preliminar discussion on Fee Redistribution

General Chat
1

Summary:

This text is a preliminary discussion to know what the community wants for the fee distribution of Spectra. Two points are discussed, the method of distributing the fees and the proportions received by recipients.

Context:

We recently published the SGP 4, whose goal is to enable the collection of fees by the Spectra Protocol. Two main points need to be discussed and decided upon by the community :

1. Distribution methods:

The team has considered three different methods of distribution:

  • Distribute the Collected Fees as received: This method would let the Spectra Protocol distribute the fees in the multitude of different tokens it collects from all assets listed.
  • Buy Back APW Token & Distribute: This method involves using the fees collected from the protocol to buy APW tokens, creating demand for the token that directly depends on the performance of the Spectra Protocol. The APW tokens will then be distributed as decided by the governance.
  • Distribute the Collected Fees in ETH: This method uses the fees collected from the protocol to buy and distribute ETH, the main asset of most chains where Spectra will be deployed.
  • Distribute the Collected Fees as received
  • Buy Back APW Token & Distribute
  • Distribute the Collected Fees in ETH
0 voters

2. Distribution recipients:

The distribution of the fees should reward all participants in the Spectra Protocol. It is up to the DAO to decide what the distribution proportions should be:

  • 100% to veAPW lockers
  • 75% to veAPW lockers, 25% to the DAO treasury
  • 50% to veAPW lockers, 50% to the DAO treasury
  • 25% to veAPW lockers, 75% to the DAO treasury
  • 100% to the DAO treasury
  • 100% veAPW lockers
  • 75% veAPW lockers, 25% DAO treasury
  • 50% veAPW lockers, 50% DAO treasury
  • 25% veAPW lockers, 75% DAO treasury
  • 100% DAO treasury
0 voters
2

Hello and thanks for the proposal!

Since the protocol is facing a huge lack of liquidity for its $APW token, I suggest a different solution, which is the Buy Back & Lock (POL) :

  • Collect fees in ETH (100% for the DAO)
  • Buyback $APW with 50% of the $ETH collected
  • Lock to provide liquidity 50 APW / 50 ETH (POL)

Second idea option :

1 Like
3

Hello,
I agree that liquidity should be a priority.
I am rather for an evolutive solution.
For exemple:

  • at the beginning we allocate 100%, then as soon as the liquidity reach a certain maturity (as to be determinate) we decrease it for 75%, then 50% etc… The 25%, then 50% remaining can then be used for rewarded the ve APW lockers.
  • Or we can decide to decrease the allocation linearly. We start with 100% and each epoch we decrease it by 1% for the benefit of the veAPW.
  • Or we can decrease the allocation by epoch. 100% at the beginning, after 5 epoch 90%, 10 epoch 80% etc…
    All numbers are taken as an example.
    Thus the progressive allocation of fees for stakers encourages buying pressure.
1 Like
4

I’m 100% aligned with your vision :handshake:

First we allocated everything until we reach a predetermined “enough” liquidity target, then when target reached, we start the discussion again to redistribute à split % to veAPW stakers + DAO.

I understand that the main goal of those proposals are to reward long term veAPW stakers with more incentives in order to create demand but if you can’t buy the token because of ultra high slippage, creating demand is useless.

1 Like
5

I agree with both comments:
→ Liquidity is a priority
→ We can always re-adjust when this changes

and I am in favour of converting the revenues to ETH (2 times a month or 1 time a month depending on the revenues collected), and join the balancer pool (Liquidity Pool (v2): 50APW-50WETH) with ETH.

On a practical level, because of the operational costs (and fees), redistributing revenues to veAPW holders would have been potentially inefficient at first. Better to activate this at a later stage/ with more substantials revenues, while collecting POL for now.

3 Likes