SGP 5 - Use APWs returned to the DAO as locking incentives

Summary:

Send all of the future APW gauges incentives reduction to APW lockers instead of returning them to the DAO.

Context:

Spectra Gauges enable voters to choose to reduce Gauge incentives by returning APW incentives to the DAO. During the latest Gauge votes 304,011 out of the 3,387,628 voting power has been used towards reducing incentives. According to the distribution schedule 69,631 APW are planned for distribution, thus 6,353 APW will be returned to the DAO.

Rationale:

The goal of the token distribution schedule initially proposed in SIP 0 and accepted by the DAO was to foster participation in the early stages of the Spectra protocol. However, we can see that the locked APW holders decided to return a high amount of token to the DAO, in the potential fear of dillution. Returning those to the locked holders, instead of the DAO, should appeal to holders, and foster locking of the token.
The annualized APY including these new incentives added to the locked incentives voted in SGP 0 is illustrated in the following chart:

We can see that if this proposal was already live, the APY for lockers this week would be 13.57% APW per veAPW instead of 3.82% APW per veAPW.

Proposal:

We propose to send 50% of the future APW gauges incentives reduction to APW lockers, proportionally to their share of the veAPW supply.

Voting options :

  • Yes, send all of the future APW gauges incentives reduction to APW lockers
  • No, do not send all of the future APW gauges incentives reduction to APW lockers
  • Abstain
  • Yes
  • No
  • Abstain
0 voters
2 Likes

Hello and thanks for the proposal!

I think the emergency is to fix the huge lack of liquidity of the $APW token and propose that the DAO keep the APW and allocate it to POL.

On this parallel proposal I suggest to collect fees in ETH (100% for the DAO) to add protocol owned liquidity (50% ETH / 50% APW).

2 Likes

I agree with the fact that liquidity is a priority as mentioned here, and that it would make sense to use all ETH collected that way for now.

I do think on the other hand this proposal could be separated from it, in the sense that fees collected/return to the DAO votes are distincts/ hard to coordinate.

I would actually edit this proposal to change completely the “return to DAO” to a “return to lockers”, in the sense that it would then allow us to keep the same emission curve while being potentially more rewarding to veAPW lockers that at this stage are locking themself at a early stage of the V2 which reduces APW circulation while not earning directly any revenues otherwise (although this depends on the results of the fee repartition ofc).

3 Likes

I agree totally makes sense

My care is about creating more liquidity helps more whales to play their game instead of focusing on rentability for the protocol and rewarding for holders.
retails don’t care much about slippage if their’s a potentiel good return.
If a good base of long therme holders come - solution for liquidity will be easier (?)

We are not in favor of this proposal.

We believe that the majority of future veAPW holders will be protocols, or at least B2B customers looking to incentivize their pools and not looking to generate revenue from locked APW (this is notably our case).

From a strategic point of view, we believe that Spectra should focus on increasing bribes to voters, thereby generating additional revenues for veAPW holders, thus attracting new locks.

2 Likes