TL/DR : We propose to renew the PAL liquidity mining program for four months (until end of october 2023), and suggest an automatic budget reroll if no changes are required by the end of the period.
Context :
This proposal is a follow up on PGM-12-2 posted in May 2022, to report on performances and update the budget for Q3 and Q4 2023.
Over the past 13 months, the DAO has distributed 1,934,089 PAL to incentivize deposits on 4 different pools:
- Curve-PAL/ETH (PoL farming)
- Balancer-PAL/USDC (PoL farming)
- Balancer-PalstkAAVE/stkAAVE (LM) → will transition over this month
- Arbitrum-Balancer-PAL/OHM (PoL farming)
The program was initially allocated 875,000 PAL for a 6 months period from June to December 2022, and has been tacilty continued for the first semester of 2023. S-2 2022 was more conservative, and the DAO actually underspent the budget due to its inability to fill Quests at the time, saving 297,807 PAL that were returned to the DAO multisig. S-1 2023 was more chaotic, as we had to use these incentives more aggressively considering the extremely negative market for PAL.
In order to foster the project’s network effect as well as expand PAL liquidity on more capital efficient blockchain layers and capture more of the juicy BAL incentives, a PAL/OHM pool and gauge were deployed on Arbitrum on June 12th.
After this whole year of incentives, the DAO still controls 26,500,000 PAL (53% of the supply) without considering PoL (which is of ~2.3M PAL), for a grand total of 58% of the supply.
Rationale :
PoL farming still represents close to half of the DAOs revenue and we believe it shouldn’t be discontinued entirely before the DAO is able to be entirely profitable without it.
As per PGM-12-2 and because the GHO launch is getting closer and closer, we incentivized the palStkAave LP in order to remain one of the largest “holders” of StkAAVE hoping to enable the bootstrapping of Dullahan. Since it was the only net negative emission done by the protocol, we reduced it to its strict minimal efficiency, and will modify to more aggressive parameters once the transition to dStkAAVE is done.
Additionally we would live to move 100,000$ of liquidity from Curve to Uniswap v3 via Bunni and start incentivizing at full 2x cap (expected cost of 1650 PAL / week → 6,600 PAL / month), which will be taken from the Curve incentives. Reminder that Bunni emission efficiency is currently slightly over 2x.
Finally, the budget should remain unchanged for Balancer PAL-USDC, PAL-OHM incentive campaigns.
For this reason, we want to renew the campaign, with 100,000 PAL / two weeks (vote incentives round).
Means:
650,000 PAL
Sustainability:
This program will come to an end as PAL tokenomic v2 is released by the end of the year, every non-spent asset will be returned to the DAO treasury.
Voting options:
Yes / No / Abstain
Community poll:
- Yes
- No
- Abstain