PIP-XX: Tokenomics 2.0 - Boosting system

Paladin Improvement Protocol (PIP)
1

TL-DR: Decide on a boosting multiplier that will balance incentivizers’ subsidies and aligned voters rewards.

Context:

With PIP-14 passing, Mithras Labs has started developing the Vote Flywheel with the hope of pushing out this major update before the end of the year.

Before the deployment of these new tokenomics, we still need to iron-out four important parameters and processes that will define its success:

Rationale:

The boosting ratio will determine how much default emissions go to non-aligned stakeholders and how much aligned stakeholders can earn. This system was generally pioneered by Curve with veBoost and also serves as an anti-whale system preventing whales from monopolizing emissions. This system seems mostly misunderstood by a large number of users, which is why most projects adapting it to their tokenomics default to a 2.5x boost, like Curve did.

There is precedent for larger boosts like on Bunni, who experimented with a 10x boost before lowering it to 5x. Their parameters had to be lowered because the base emissions were too low to attract significant TVL. With Quest, such a problem is kind of moot since Quest creators already offer base rewards and our system does not impact this part of the reward structure.

There could be an argument for an even higher boost, and we remain open to it, but we believe, especially at launch, the vote flywheel should be as accessible as possible to everyone. With a 5x boost, base users would get ~20% of rewards streaming to them if they participate in Boosted Quests, amounting to ~10,000 PAL if our recommendation passes.

Means:

  • 3 months of development

Next steps:

  • Let governance decide on the actual system implementation (Vote Flywheel and LOOT);
  • Second proposal on the total budget of the program, which is likely to be the largest DAO spending ever;
  • Third proposal for LOOT to decide where the real-yield will come from (Warlord fees to begin with, most likely) as well as the parameters of our custom boost system;
  • Finally, we will need to introduce a Quest whitelisting framework.

Voting options:
For / Against / Abstain