Summary: Optimize PoL and vote incentives for liquidity efficiency
As per Treasury Management proposal #7, Paladin has been harnessing PoL farming for the past eighteen months, while it has been a successful way to pass the bear market and prove our product market fit, the use of the farmed assets needs to evolve with the DAO needs.
The still ongoing declassification of CRV as a strategic asset has allowed to deepen on-chain liquidity for PAL token pairs, bootstrap Warlord TVL which is currently experiencing a major growth phase, and contribute to reducing debt to go forward as a self-sufficient protocol.
The current priority should be to enable as efficient as possible liquidity while farming assets to bolster revenue and accelerate loan repayment.
Migrate the 10,000 USDC and PAL equivalent destined to the Balancer PAL-OHM pool to the PAL-FRAX on Liquis;
Starting from this proposal, sell all CRV rewards into 50% USDC and 50% CVX;
Deposit all CVX into Warlord;
Progressively migrate back all funds on the veToken MS back to the main MS for accounting clarity;
Extend incentive budget until january 2024 (135,000 additional PAL needed);
Recent vote incentives efficiency on captured emissions show ratios of 1.4x for Balancer/Aura ecosystem vs 1.8x for Bunni/Liquis; considering the respective POL shares on both PAL-OHM and PAL-FRAX pools as well as their current liquidity depth, it seem accurate to rebalance the TVLs. This also contributes to a better routing of PAL swaps for stablecoins on aggregators.
The update of Warlord weights as per PIP-18 enabled to strengthen staked $WAR APR due to the strong dominance of $Aura token in the vault, however the need for CVX inflows remains important to activate the full flywheel with other protocols of Paladin ecosystem such as Quest through the delegation auto-voter, as well as rebalancing progressively the index and fetching the best CVX yield available (~40% APR).
Regarding PAL emissions, since Paladin is reshaping its tokenomics & several proposals were already published with the objective to attract more lockers & enable them to redirect extra emissions to whitelisted Quests :
PIP-14: Tokenomics 2.0: Approved the global design idea
PIP-16: Emission Budget: Approved a max spending (15,6% of PAL supply) over 3y
PIP-17: Boosting System: Approved x5 initial boost for hPAL lockers on LOOT yield
The current emission schedule will be renewed with the ongoing budget as per PGM-12-3 for what should be the last period, with the following parameters:
- 55,000 PAL per round (110,000 monthly) - down from ~ 100,000 PAL per round.
Split between 3 gauges and ecosystems:
- PAL - ETH on Curve
- PAL - OHM on Balancer (Arbitrum)
- PAL - FRAX on Liquis
There should be 4 to 5 rounds left before the rollout of tokenomics and we have 93,000 PAL left from the previous budget. So we are requesting an additional 135,000 PAL budget.
For / Against / Abstain