PGM-XX: Tokenomics onboarding program with OTC deals

Paladin Governance Management (PGM) PGM - Unapproved
1

Summary

Facilitate onboarding of new projects with an amount of PAL dedicated to OTC deals.

Context

This post ideas were first suggested in PIP-16 comments, then included in the PIP-XX as both topics are linked but decided to split both after receiving feedback about it, and considering this proposal requires an expense.

This proposal mostly makes sense if the conditional whitelisting system proposed in PIP-XX is approved, as the OTC deals matching were thought as a way to help onboard more users & reduce the DAO liabilities but posting both at the same time for context.

Rationale

The goal of this proposal are to limitate the slippage for external projects interested to buy & lock PAL, as well as accumulating stablecoins to reduce the DAO debt.

Onboarding program

The goal is to allocate a PAL budget to match up to 40% of market buys with OTC deals, managed by the treasury committee to encourage PAL acquisition from external projects. Accumulating USDC from OTC deals can also help to accelerate the debt repayment.

Process

Assuming a project wants to acquire 100K PAL ($10K at current price), it could do the following:

  • Contact the committee (communicate total amount to buy & setup OTC deal price)
  • Market buy & lock 60% (so $6K here e for 60K PAL)
  • OTC buy & lock the remaining 40% (So $4K here for 40K PAL)
  • External projects submit PIR to get their quests whitelisted

40% OTC matching amount should be capped at $10K total buy to insure this program allows to onboard as many projects as possible. Moreover, no deals should be done under 0,1$/PAL.

Committee could define the OTC price based on the 1 week TWAP price.

Budget

The proposed allocation is 1,5M PAL - 3% of the total supply - to onboard new lockers.

Assuming most want to acquire & lock 100K PAL total, this could:

  • Match up to 37 acquisitions at the current price (1,5M / 40K)
  • Almost double the amount of PAL locked (+ 3,75M locked)
  • Generate up to $148K at current price so more in reality (4000$ x 37)

As a reminder $180K remains on the Mimo loan which must be fully repaid in 5 months, so the above solution would cover most of it while onboarding & aligning many projects.

If the conditional whitelist mentioned above is approved, it ensures that projects that project would indeed lock their PAL, otherwise the whitelisting PIR would be invalid.

This proposal only concerns the Paladin DAO, but if @MithrasLabs wants to allocate more budget & use the funds to extend the runaway used for Paladin developpement please share it in the comments, the % can be reworked to consider 20%/20% for the DAO & the company.

The committee could be mandated to manage it as well.

Pros:

  • Reduce slippage on PAL buys for interested projects
  • Enable to potentially onboard many projects
  • Generate enough stables to repay most of the loan

Cons:

  • Sell up to 3% of the PAL supply OTC
  • Requires the committee to manage deals

Means

  • Up to 1,5M PAL

Technical Implementation

  • Transfer OTC budget to the committee (or to a specific msig which can also be considered)

Voting Options

Yes, approve Onboarding program
No, rework proposal
Abstain

Poll

Should we create a OTC deal budget to encourage new lockers & reduce the DAO liabilities ?
  • Yes, approve Onboarding program
  • No, rework proposal
  • Abstain
0 voters
2

Is there any particular logic behind the 40% OTC, 60% market ratio?

3

Gm ! The goal is to have a majority of market buy, and also have a potential important impact on lock rate while covering most of the remaining Mimo loan at current price.

Outside of that, no additional logic behind this suggestion which can be reworked if needed, do you think we should reduce the OTC part ?

Also, note that this proposal mostly make sense & should be submitted if the Conditional whitelisting PIP is approved. It can still make sense financially speaking even with a classic wl, but it will have a lower impact on tokenomics onboarding imo

4

Why would the increase in price resulting from this new buying pressure from protocols be an issue? especially if they will lock the token anyways?

And is there a specific reasoning to set the OTC portion at 40% or is it just a random number?
The slippage might be an issue for some, and not for other protocols. I just wonder if offering OTC deals to every protocol is the right solution.

5

I am absolutely not against OTCs / ways to onboard partners while engineering buying pressure, but I honestly feel the additional WL is totally counter-productive to the whole tokenomics, you can find my reasoning here: PIP-XX: Whitelisting process for tokenomics emissions - #2 by Figue

Also a bit at a loss on who and how will we find OTC partners.