In line with the recent rebranding, APIPs will from now on be referred to as SIP (Spectra Improvement Proposal).
My name is Viras, and I have been engaged by Spectra to assist in the choice of the new tokenomics and in the crafting of the governance proposals.
Proposition to update APW’s tokenomics to a fine-tuned ve(3,3) model.
APWine rebranded to Spectra during summer of 2023, and as we prepare to roll out the second version of the protocol, we worked on new tokenomics for the APW token.
In V1, the APW token was following the classic ve model, i.e :
- Voters choose the pool to which they want APW rewards to be allocated
- Liquidity Providers earn the fees generated by the pool as well as the rewards determined by the votes.
This proposal presents updated tokenomics for the second version of the protocol.
In the V2, users are able to tokenize their Interest Bearing Token (IBT) or its underlying into Principal Tokens (PTs) and Yield Tokens (YTs) to trade them on the AMM. Liquidity of those tokens are handled by LPVaults, defined by the underlying token they receive as deposit (e.g. USDC) and their yield strategy (e.g. Morpho lending), their duration and renewal date. Liquidity Providers (LPs) deposit underlying tokens liquidity in the vault to let users trade their tokens. They are entitled to yield from the yield strategy, swapping fees generated on the AMM, and additional potential incentives. The protocol charges 0.1% as a fee to PT/IBT LPs depositing in the vault and 0.1% upon tokenizing an underlying to PT/YT.
We propose to shift the current gauge system to a new one in which Voters choose weekly the vault to which they want APW rewards to be allocated, and earn 70% of the deposit fees generated by the vault, while the remaining 30% of the fees get collected by the DAO’s treasury. We are currently working on another proposal aiming to spread the collected rewards during several weeks, building a more continuous distribution of revenues to the voters and better alignment of incentives between voters and LPs.
Additionally, Spectra will natively support bribes directed at Voters. This feature will empower any user to play a role in the incentivisation of markets. The fees will be converted to ETH upon collection.
The votes will decide the proportion of the weekly APW distribution directed to each vault’s LPs. Moreover, the weekly APW distribution will be adjusted every 4 weeks based on the DAO’s members’ votes.
Overall, these changes would let Spectra’s users earn a bigger part of the protocol’s revenue while better incentivising the voters to choose profitable vaults, and hopefully make parasitic strategies less profitable compared to the incentivisation of useful pools.
The core team proposed the initial percentages for the DAO fees. Using the initial data, contributors within the DAO can propose alternative fee levels or charging methods
- Yes, Update the rewards model and the additional APW distribution
- No, do not update the rewards model and the additional APW distribution
- Upgrade current ve model
- Do not upgrade current ve model