TL-DR: Decide on the revenue sharing asset and the vesting duration of PAL
Since PIP-14’s passing, Mithras Labs has finished the smart contracts for the Vote Flywheel and is moving to the final production phase of the product, with a target launch in Q1-2024.
Before its deployment, several parameters and processed needed to be decided by the DAO:
- The emission’s budget (PIP-16: Tokenomics 2.0 - Emission budget - #15
- The boosting ratio (PIP-17: Tokenomics 2.0 - Boosting system)
- The Whitelisting system (PIP-20: Whitelisting process for tokenomics emissions)
- The reward system (this proposal)
This proposal is the fourth and last parameter needed before launch.
In PIP-14 we introduced the concept of LOOT as a wrapper batching PAL emissions and eventually, later on, revenue sharing.
We recommended the creation of LOOT in order for two reasons:
- Create a system where the PAL is vested in order to mitigate the high emissions the Vote Flywheel will create;
- Simplify the system by only distributing one token;
Of course, this creates the disadvantage of an additional friction since users will need to redeem their LOOT into PAL and the reward currency, so there are always trade-offs.
In terms of vesting, we are suggesting a 14 day period, which is the round window for vlToken rewards, meaning that users can claim & vest on the same time-frame. If some people think this is too short or too long, we’d love to hear their arguments, but think it would be good to think in 7/14 day increments.
As for the reward tokens, we should only target the most resilient assets, since they will be integrated into Paladin’s immutable parts. Only 4 tokens make sense in this case considering Lindyness: wETH, DAI, LUSD, RAI & OHM. Since DAI is migrating into a new token, the unknowns are too important for us to rely on it. RAI is not liquid enough considering revenue growth and Olympus’ situation with Cooler Loans still needs a bit more time for us to see its efficiency. So it depends whether we want the system to be dollar based, or following ETH’s trajectory.
Option 1/ Option 2 /…/…. / Abstain