PGP 6: Transferability Event Strategy

The core team has prepared a plan to make Paladin a powerhouse from launch. Every aspect of this proposal is up for change, please voice your opinion, this is the most important proposal of the month.

Summary: Doing an LBP with unclaimed PAL from the airdrop and use this treasury as Protocol Owned Liquidity (POL) to drive utility on Warden and revenue for the DAO.

Context:

Warden has the potential to be an extremely powerful money lego in the Curve Wars but will need Liquidity Mining with a market pricing to compete with other yield optimizers on top of Curve (details here 3).

After the committee is elected (vote begins on Thursday 03/02) they will elect an Elder who will actively participate in the discussions and negotiations for the execution of the plan agreed in this PGP.

Instead of simply enabling transferability, we believe the DAO should do an LBP to mark the event.

Rationale:

Why not just make the token transferable ?

Over 815,000 PAL tokens planned for airdrop were sent back to the Paladin Treasury on 01/02/22. Because $PAL is currently non-transferable 25% of eligible accounts claimed, this is an extremely positive outcome as it has allowed the DAO to skim out a lot of mercenary capital. Unfortunately it also disrupted the emissions planned.

Paladin should seize the opportunity created by the available capital and the attention it is currently generating to absorb POL via an Liquidity Bootstrapping Pool (LBP).

Selling them will allow us to reward active contributors, let new power users join us, make the DAO benefit from a good price discovery mechanism and create the biggest protocol owned liquidity possible early on.

More than simply acquiring POL the core team believes this month can become a huge catalyst of success. By porting that liquidity to Curve v2 and enabling a gauge, the DAO can become the first large client of Warden and constantly farm at max boost.

Means:

  • 815,000 PALs coming back from unclaimed airdrop + 185,000 from DAO treasury

Sustainability:

This plan is supposed to enable long term revenue to the DAO as well as making us the first biggest customer of Warden (and the dapp that should be released when Curve votes on enabling our gauge). Adjustments to POL can be made via an Olympus Pro program later on.

Voting options: Yes / No / Abstain

16 Likes

Sounds good and a nice way to launch … we can then adjust as we must ! I will vote Yey ( I would also recommend opening a chat with Copper Platform for launch followed by some incentives directed for a long run at Crucible holders at Alchemist might be fruitful)

3 Likes

I would be also in favor of the proposal (vote yes) as it is a really good way to encourage participation and generate new users.

2 Likes

Earning yield on stagnant PAL seems like a no-brainer to me.

In support of this proposal. Is there an address where we can see the current holdings of the treasury?

2 Likes

I vote YES, that`s good for the new users

2 Likes

Yes.

The protocol needs to find a way to use Warden and an LBP would be a good way to raise the funds required.

Also, from a community point of view, an LBP would provide a straightforward answer to the question “How do I acquire PAL?” The liquidity mining option, while good, requires taking a position in another token, which may or may not appeal to people.

3 Likes

It does also create substantial revenue for the DAO by harnessing the speculative nature of a token.

Not yet as there are multiple adresses for now, we will clean it up for visibility ASAP; There should be ~32M available PAL.

As @Will explained yesterday during the call, we will also need ETH to pay for the council’s transaction and seed the LBP. Mithras Labs (the company I represent), can loan to the council the required amount. The loan could either be paid back in ETH or LP tokens later on.

3 Likes

100% agree with this proposal. Paladin has been moving at a quick pace while simultaneously staying cognizant of embracing our governance mission. While moving forward with transferability, having an LBP to make sure that the capital is used to absorb POL is methodical, signals good practice and fulfills a core part of the long term plan of the protocol and DAO.

3 Likes

Full support, I will vote Yes to this proposal !
Can’t wait to grab some PAL on the LBP :eyes:

2 Likes

smart, nice proposal, I’m for!

3 Likes

It’s a well-crafted proposal that demonstrates a thorough understanding of the dynamics of the Curve Wars, and I’d expect no less from Paladin’s team.

We ran into similar questioning with the ParaSwap DAO, and I’ve explored the various ways to diversify from PAL/PSP to ETH to grow POL. I think the LBP is probably the most efficient way — granted that there is a strong demand for the token.

Given that this event introduces the PAL token on the markets, I think the demand will be sufficient.

My only (slight) concern is regarding the use of the Olympus Pro program. There’s a fee (3,3%) and concerns regarding Olympus Pro’s effectiveness, which arose from an analysis of the existing programs’ data of the programs that finished already.
To learn more on this point, check what Tenzent shared on the ParaSwap gov forum on the topic.

So how to solve this? Here’s my idea: many projects within the “French DeFi” are exploring POL right now and have needs for bonds: ParaSwap, Paladin, Jarvis Network, APWine, etc. Instead of each doing its own, how about working together?

We could pool resources together to build our bonding system. It will allow complete control over it for the projects involved and the avoidance of the 3,3% fee and other concerns potentially coming with Olympus Pro.

I hope this is helpful, this is pretty much cherry-picking from my end to optimize the proposal further, but I’d already support it in its current state.

6 Likes

A cross DAO partnership working together for POL? Very interesting.

3 Likes

A defi union? I’m interested. Will pitch this to Threshold as well. Who would coordinate the effort? Wish we could have a cross-discord chat.

4 Likes

Hi there! I’m Disiaque, governance scribe for ParaSwap.

I find Brice’s idea very convincing: it would be interesting to gather the forces of the “French DeFi” to develop a collective solution to our common problems. In particular, POL.

What do you think about giving some time to this perspective? The first step would surely be to collect the opinion of the DAOs that could be interested. If there is sufficient interest, we may be able to arrange a meeting with delegators from each of the DAOs.

It’s a great project, and I’d be happy to contribute to it. Long live cross DAO partnership! For a better liquidity efficiency and a new adventure!

2 Likes

Personally, I think it’s a no brainer and this objective should be pursued as long as all parties remain neutral and there is no French bias in the end.

But before all of that takes place, I think we should focus on the current proposal as is.

1 Like

Following up on my previous reply, we can tackle the Olympus issue later on. I’m 100% onboard with having a cross DAO partnership working together for POL but we should focus on one thing at a time.

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100% agreed with you and the way you organize the discussion :blush:
If this idea catches on, we will be sure to create a separate topic when the time is right.

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Ok, I’d like to re-center the debate to the actualt transferability event.

So far I feel most people agree an LBP is the most pragmatic choice, any other ideas ?
The worst case scenario is we don’t sell enough tokens, could the market absorb 500k PAL right now ?

Another important thing is that we’ll need to seed the liquidity. Not a problem for $PAL, but we will need ~200k$ of ETH. The company I represent and that develops software for Paladin DAO can loan them out at 0% interest rate for the week of LBP.

Other than that we also have to decide on a beginning price for LBP and a floor price. I was thinking of 10$ (which would mean a 20M$ market cap and 500M FDV) and going down to 0.60$ (600K market cap, 30M FDV)

Any thoughts ?

1 Like

I’m still learning about LBPs but what I do I know is I really like them. For those unfamiliar, these resources helped: Liquidity Bootstrapping Pool (LBP) | Alexandria and Loop Finance

I’m thinking that price is reasonable since a 20M$ market cap reflects the current total amount of value locked on Paladin Lending & Warden.

Those parameters sound good. Too bad we have to raise with 2% circulating supply thus creating a low float/high FDV situation but there is certainly no way around it

1 Like