Summary:Optimize POL by incentivizing our Curve gauge and splitting liquidity between Curve and Convex to maximize boost. This program will cost 204,000 PAL for 3 months and should yield 110,000 to 275,000 CRV.
Context:
We experimented with Quest and our own Curve gauge for the past 2 weeks to test out yield strategies for the DAO’s LP and prove our product’s worth. Currently we are spending 13,600 PAL / week to get 800,000 veCRV. This enables a 45%-115% CRV APY on the pool that either attracts more LPs or is hugely profitable for the DAO.
Rationale:
For the past 2 weeks our PAL-ETH gauge has been towering as the second highest yield opportunity on Curve Finance thanks to our PAL Quest. While it has failed to attract new LPs, the DAO has been farming over 1000 CRV/day which is making the endeavor worthwhile. We would like to make this incentive program last by dedicating a budget to it (13,600 PAL * 13 weeks + 2 previous weeks already spent). The weekly allocations would be changeable by optimistic governance depending on PAL price and $/vecrv market average.
To be profitable we need to boost our pool by at least 1.1x, which is not possible if we own over 90% of the pool. We recommend moving 60% of the DAO owned LP in Convex and boosting within reason the 40% left to optimize farming. This is expected to raise boosting to 1.8x (up to 80% APY) and help us showcase the strengths of Warden as well as Quest.
Means:
204,000 PAL
Optimistic Governance to tailor the strategy when needed
Sustainability:
Strategy will be reviewed in 3 months or when the budget runs out.
Replicate the strategy on Balancer on our gauge and tech are live
I think Paladin is going in the right direction by farming CRV while making it profitable relative to the cost of this operation.
In the long term to use this power in crv to benefit the interests of paladin.
I think it would be nice to have this mechanism on lowcost blockchain solutions so that everyone can buy paladin without having to pay mainnet fees.
It’s very exciting to start seeing all the pieces come together, and especially seeing that Paladin will be able to use Warden and the Quests to grow & optimise its POL!
I’m in favor of this strategy, but could you clarify some of the numbers from the last paragraph:
can you elaborate on that that 1.1x boost needed to become profitable? I’m probably misunderstanding it, but would a 1.1x boost not amount to an extra 5% CRV APR on the 40% of the remaining LP position? Is that not just an extra 350$ in CRV per week?
What’s the range you have in mind when you say “boosting within reason”? I assume we would leverage Warden to buy the necessary veBoost (and there is currently only a total of 6.5m deposited on the marketplace which would boost the pal/eth LP to 1.06x ), or does Paladin have another source of veBoost?
We’re spending 13,500 PAL (9500$) a week and farming 8600 CRV (10,400$). Ok, so with price volatility we’re currently profitable -_-
Boosting within reason is paying less than earning with the boost. Our strategy is threefold. First we’re releasing a Convex pool to attract more depositors or raise our boost access as a DAO. Then we split our POL between Convex and Curve. Then we can boosr ourselves via Warden.
While I think that diversifying the POL is appropriate, especially over the long term - I think it’s worth waiting to see the effects of the recent coverage in Curve Market Cap letter to see if active Curve voters take note of this recent coverage and adapt their strategies.
Hello everyone, market was pretty bad this weekend and we failed to communicate enouogh on the proposal. Vote was overwhelmingly in favor but didn’t pass quorum. We juste relaunched it in hope to see it passed before end of week: Snapshot
