PIP-XX: Restructuring Paladin - Migration

Paladin Improvement Protocol (PIP)
1

TL-DR: This is part 1 of the DAO restructuring - setting up the parameters of the token migration

Context:
PAL has been the governance token of Paladin for the past 3 years. As the project refocuses on its most profitable protocol (Rings), we believe that having one unified value accretive asset would streamline value in a significant way.

We believe a migration is a better option than creating a fully new token since the same development team is behind the project. We’re also using Paladin technology at the core of the protocol (Quest) and have leveraged Paladin funds to build the project out. Protocol Owned Liquidity has always been a focus, and migrating to a new token would mean we can keep the same high quality liquidity at no additional costs. Furthermore, doing right by the current stakeholders seems simply a better alternative than maximising short term value from a new token. We want the project to succeed because it’s good, not because it’s the new FoMo.

Our suggestion is to deploy on Sonic since this is where we are seeing the brunt of the economic activity of the protocol. Additionally FeeM will provide additional DAO revenue simply by the fact the token is Sonic native. The low fee environment will also help us make relatively complex tokenomics use-able for retail users.

Technical implementation:
The migration will last two years exactly. After this period, all unclaimed NEWTOKENs will go to the DAO Treasury. All hPAL lockers will be mass unlocked once the migration process begins and PoL has been migrated. Currently locked users will have to lock for at least a year and will receive veNEWTOKEN During this period, users will be able to deposit their PAL into a contract and receive the NEWTOKEN.

Additional considerations
Total supply

PAL is currently distributed in the following fashion:

  • 42.32% Paladin Community Stakeholders
  • 43.35% DAO treasury
  • 11.5% Mithras Labs Contributors
  • 2.83% PoL

Supply numbers are a psychological tool, while the current numbers are acceptable we recommend moving to a total supply of 20,000,000 NEW TOKENS. Meaning that each stakeholder would receive 4 NEWTOKENS for each 10 PAL migrated.

Inflation:
While we’re comfortable with executing on the short term with the available tokens, we do not want this to hinder us in the future. The goal of the coming proposals will be to allocate most of the supply (around 85%) to specific systems making emissions much more predictive. As such we will bring a future proposal up separately on the matter in order to avoid over-cluttering this proposal.

Migration safeguards:
A big issue with migrations is arbitrage between the new token who has the most liquidity (all PoL will be migrated to NEWTOKEN pools) and the old token. A way to limit this is to vest / lock migrated users. This is especially important here as we will mass unlock all hPAL users and 53% of the supply will be entirely liquid with only 3% of it in guaranteed liquidity. We believe forcing a lock isn’t for everyone and as such, users will have 2 options:

  • Lock for a year and earn 4 veNEWTOKENs per 10 PAL as well as upcoming revenue sharing in NEWTOKEN;
  • Migrate 10 PAL for 3 liquid NEWTOKENs;

Means:

  • Cancel VoteFlywheel emissions immediately;
  • Build a migration tool/UI;
  • Cover development costs (40,000 EUR)
  • Deploy NEWTOKEN

Voting options:

  • Do a token migration to NEWTOKEN and deploy it on Sonic;
  • Do a token migration to NEWTOKEN and deploy it on Ethereum;
  • Keep PAL
  • Rework the proposal
  • Migrate on Sonic
  • Migrate on Ethereum
  • Maintain PAL
  • Rework
0 voters
1 Like
2

I think it makes the most sense to “Do a token migration to NEWTOKEN and deploy it on Sonic” but I think the vesting for the migration should be different to do something similar to xSHADOW so the lock users get the highest reward (4 tokens), a 6 month vest for 4 tokens liquid, or instant exit for 2 tokens with the forfetted tokens going back into a reward pool for lockers, as an example.

2 Likes
3

Its a no brainer to to Do a token migration to NEWTOKEN and deploy it on Sonic, since a lot of activity is on there.

1 Like
4

Thanks for this proposal !

I agree that unifying the protocols under a single brand makes sense, but I think this brand should be Paladin. Creating a new token doesn’t seems right as the goal was always to build an ecosystem that drives value around PAL.

As for the migration, I understand the goal is to be native on Sonic to drive most supply & volume there as that’s where most of the Rings activity is at the time, but it would also create complexity especially for hPAL lockers and penalize users with the vesting / lock on migrated tokens to prevent arbitrages. Moreover, the token is already live on Sonic and easily accessible with LayerZero so even the migration doesn’t seem worth it.

Maybe another solution to drive most of the PAL supply & volume on Sonic could be to simply increase the POL there (with or ideally without reducing the mainnet one). This + profit sharing introduction should help to organically reach this goal.

The ability to stake/lock/relock on mainnet could also be restricted when profit sharing is launched, insuring that all new stakers/lockers would go on Sonic while making sure old lockers can receive rewards until their lock ends.

This seems more efficient than building a migration tool & dev costs, as well as vesting users. 40k could also increase Sonic POL by approx 30% at current prices.

5

Keeping the Paladin brand is unfortunately not really possible.
Last event we attended, more people knew Rings, a two month old project, than Paladin, a 4 year old project.
The Rings X account has 8000+ followers in 4 months, while the Paladin X account has barely 6000 in for years, with a lot more marketing spending.

It’s very obvious we are pivoting, and a rebrand would help a ton making this clearer to everyone.

On the migration, we have no choice but to migrate the token if we want to enable inflation (keys were burned at TGE) and there are some design changes that we need to push (total supply change, ticker if rebrand, etc…). Each of these step will be pushed progressively, this one is specifically dedicated to the migration tool.

In order to lessen the costs, we will not be asking for maintenance fee for April, focusing instead on the migration development fee.

1 Like
6

Thanks fo the proposal.
I agree on the need to unify all of Paladin’s activities under the same brand.

Can you elaborate on the logic behind this choice ? Why chose 20 millions and not 25 or 100 ?

It doesn’t seem right to force a 1 year vesting or a 25% slash on holders that may only have a few weeks/months left in their lock.
If the megration period is scheduled to last 2 years it would be easier to let current locks expire and then migrate them.

2 Likes
7

To be clear, everyone will be unlocked for the migration (this vote will mass unlock hPAL). Locked or liquid has no impact on your migration choices.

As for the metric, the idea is that there is a clear disfavor towards assets worth a cent or less. 20m is a clean number, but closer to the BTC supply, which can help quick comparisons.

8

https://snapshot.box/#/s:pip.palvote.eth/proposal/0x7c43fa6b3e07f09b5e54358ed0f940196fa3607a861468408a98c91334cdfd77

Vote is now live

9

lfg. looking forward to the rebrand!

10

This is mostly because it was pushed by big accounts like Sonic, Cronje etc but imo this should have been used as an opportunity to highlight the full Paladin ecosystem from the start, and it can still be done but gotta mention it as “Rings by Paladin”

Sounds like the decision is already taken, but really not a fan of migrating the token as it can have very bad effect if done wrong / with bad timing which could be the case here considering market uncertainties.

Also, agree with Frieeze on the slashing/vesting. If a migration is approved, long term holders shouldn’t be penalized. This should have been removed before pushing to vote.

TLDR:

  • For a visual rebrand (logo/UI) & growing liquidity on Sonic
  • Against a token migration (should remain PAL on mainnet)
  • Strongly against migration with slashing and/or vesting for LT believers
1 Like