Since launch, Quest became a more competitive product thanks to its fee rebate problem dependent both on loyalty and volume. While some of the conditions have proved useful in terms of BD, not all of them are efficient or operationally feasible. This proposal aims to build on top of PIP-7 thanks to Quest v2’s new fee tiers feature. Starting with v2’s launch the DAO will be able to manually WL addresses to give them a custom fee tier (between 2 and 4%).
For context, here is a table recapping the current fee structure (courtesy of Dydymoon):
First of all the market has shrunk to such an extent that the two final tiers are unlikely to be reachedon a weekly basis. Additionally, this large number of tiers creates additional operational overhead.
We recommend reducing the framework to 5 tiers (vs 7 before):
With such a framework we are suggesting to keep the loyalty discount and expand it to all tiers. Additionally, we are considering to reduce the maximum fee discount to 200,000$ as no project is currently distributing more incentives than this.
Gm, Thanks for this proposal ! Overall supportive of a framework update, as it make sense to simplify after a few months using it.
The only aspect where I think we could update is on the Ecosystem partners conditions:
Projects should be able to reach 2% with a high amount bribed weekly, even if they don’t fit the specific conditions mentioned below. It can be set high like 400K (even if no project is bribing that much atm, bear market won’t last forever)
So imo "Any amount should be replaced by “400K or x% veToken or x hPAL”
Then on the specific conditions:
Hold 10% of veToken Supply: We could reduce from 10% to 5% of holdings, attracting a few more whales. It could also make sense to switch this rule for x% of the veToken is voting on your Quest(s), rather than just holding it.
The latter would enable to onboard projects like Aave if the SM upgrade is implemented, as the DAO would hold less than 5% but would have way more voting on its gauges.
Hold at least 250K hPAL: I really like the idea of giving favorable conditions to holders, however imo requesting this amount staked is not enough compared to other conditions to be ecosystem partner, and is not really secure for the project since the holder can just exit after a cooldown.
I think this rule should be moved to “Have x hPAL locked for at least 1 year”, which enables to align interests, and is much more fair compared to other conditions.
About the amount, why did you choose 250K ?
Considering the volatility, it seems better to define a $ value, so the amount of PAL requested can’t become too high if price increase or too low if it decrease.
So TLDR, Ecosystem partners conditions could be something like:
Spend $400K of bribes weekly, OR
Have 5% of a veToken Supply voting on your Quests, OR
Hold x$ of hPAL locked for at least 1 year
Considering the two solutions are expensive, the $ value for locked hPAL should be higher than 25K$ imo, maybe 50-100K$, wdyt ?
hPAL because it’s easier to oversee than checking locks (you complained by oversight complexity on another topic recently). I dont think we should have a problem in having clients buy to get the discount and sell later on. Vote incentive needs are never permanent and forcing it is just not aligned with our needs
250k is ~25k$ at current prices. This means that you need 1,25M$ of vote incentives over a year to amorticize it at a rate or 25k$ per year. Anything over this is absolutely non realist for 99% of the ecosystem
I don’t see where is the complexity to fetch projects positions value locked.
Yes votes incentives are not permanent, especially on the same gauge but strategies can be changed by projects (new pool, new dex etc).
Offering the discount to aligned (locked) projects would also definitely reduce the risks of seing Quest users go to the competition imo.
This is incorrect as you’re only taking the discount into account here, however with the new voted tokenomics there should be other benefits interesting for projects.
Agree that $25K is great in deep bear, but it might need to be updated later.
What’s the issue with trying to align stakeholders & users on several aspects ?
Anyway I shared my thoughts: If the goal is to implement a PAL condition for EP, I believe PAL staking will be less efficient to align interests than locking, the amount should be defined in $ value to avoid updating it too often, and it’s really far from other conditions requirements to be an ecosystem partner with the current value proposed.
Increasing the lock rate is a priority to reduce the risks of selling pressure, and because that’s needed for the tokenomics proposed to actually work.
As mentioned above, I believe it’s better to base this amount on a $ value to avoid changing it too frequently through governance if the token price increases or drops too much.
Anyway, interested to get others delegates thoughts on this.
I believe that introducing a discount for hPAL Lockers on Quest creation is not the best system right now, and I think it’s more interesting to see how the tokenomics play out on that matter.
Because coupling both system for hPAL Lockers would mean reducing both the size of rewards they bring in Quest (as it will be subsidized with LOOT) and the amount of fees they will pay when creating the Quest, which will mean they get a double discount on their fees.
I’d rather test one or the other solution, and following previous DAO votes, the decision is to test out the tokenomics logic 1st.
I do not exclude the idea to later apply a fee discount for hPAL Lockers, depending on the success of tokenomics and this new fee framework via an amendment of the framework, an deciding on a value of locked hPAL needed based on a percentage of the locked supply or total supply, which would make more sense than an arbitrary $ value.
Thank you for this update about the fee framework. This overall amount and categorization do make sense and is more appropriate with the curent market
So if I understand well your point @Kogaroshi if you have 250k hPAL locked you can’t get this discount, right ? This means the discount is only for the holders of hPAL. In my view by allowing 250k hPAL holders to keep their discounts if they lock, you can introduce them to the flywheel tokenomics even if they originally came for the discounts. I understand the double discount point but if manageable it might be a good way to also onboard big players.
I will support the system as it is designed, even if I think locking is very important especially with the new tokenomics. However, if I put myself in the shoes of a project that wants to incentivize its liquidity for a specific perdiod I might be ok with buying and holding hPAL for 3months to try the system and get the discount but not ready to commit for 1 full year lock.
In any case I think this should be monitor closely with Paladin v2 as from etherscan there are currently only 6 addresses having more than 250k hPAL (locked or not) mostly Treasury, proxy and team I guess. So eager to see this number grows !
Ok thanks, so 3 is only staker and 4 is only locker correct ?
Good point to add the option 2 about removing this topic since it’s the one which raised the most concerns.
I get the point about double discount for lockers from @Kogaroshi indeed, but otherwise using PAL staking as a way to become ecosystem partner also means stakers can get better Quest parameters than projects aligned who locked PAL I guess.
Not really taking LOOT account for two reasons:
The amount of emission directed of one Quest can be variable depending on the amount of quests eligibles, the PAL lockers bribe budget etc
It’s also possible to attract LOOT on Quests without being a locker (by bribing hPAL lockers)
So with Option 3, hPAL stakers who bribe hPAL lockers can also get double discount (Reduced fees + LOOT emissions), despite having no locked hPAL right ?
If yes, I’m confused about what is the best here so Option 2 might help ^^
(Ps: Can this post be moved to PIP category on the forum pls ? )