PIP-XX: Utilizing Aura Finance to bootstrap PSP liquidity on Optimism

[stikers]

Like this idea. Liquidity is a major point.

[0xYtocin]

@enerow

Do you think (your personal opinion) it’s better to maximize in the first weeks/month our vlAURA exposure to quickly gain a big voting power quicker, in that case we could convert all incentives in the direction until we meet a predetermined goal, and only then distribute part of the rewards to the stakers? If so, what could be the goal (vlAURA) and how long would it take to get it?

It all depends on the numbers of course, but personally the sooner we manage to accumulate gauge voting power the better, as that transitions from a voting-incentives based emissions to the DAO being able to allocate resources ot itself every epoch without incentives.

Perhaps we could establish a goal of gauges covering a % of the average epoch redistribution? This would allow for a ‘baseline’ APR of sePSP2 emissions even before taking into account protocol redistributions.

@enerow

Wouldn’t it be better to use it to bootstrap the vlAURA voting power instead of burning 500 000 PSP/week (at today price), what do you think?

Since $ARB is on Arbitrum and this campaign is running on Optimism, it would add complications for briding and conversion if it wants to be used for voting incentives. We could explore OTC possibilities with other DAOs like AAVE did in a follow-up proposal to ‘double down’ on these gauge emission perhaps?

[stikers]

The discussion seems to be at a standstill, even though we don’t need much to finalize the proposal.

I have retained the following points:

Who manages PSP payments by epoch?
For how long do we participate?
How are rewards used? Just one option, or can we consider several?

Once these are answered, I think we can consider a vote?

[Figue]

@stikers

I have retained the following points:

Who manages PSP payments by epoch?
For how long do we participate?
How are rewards used? Just one option, or can we consider several?

I believe this could fall within the mandate of GovCo. As mentioned previously, I have no problem in preparing the payload and providing the required analysis.

If the goal is to create a new sustainable way to incentivise liquidity, my advice is to keep the farmed AURA and redistribute the BAL & OP to sePSP2 holders to increase the lock rate. This way the cost of the campaign progressively lowers until a point where external incentives aren’t needed anymore.

@0xYtocin

We could explore OTC possibilities with other DAOs like AAVE did in a follow-up proposal to ‘double down’ on these gauge emission perhaps?

My gut feeling is that most well capitalized projects aren’t keen on doing OTCs anymore in this market as they are more desperate for price appreciation than actual capital, but keen to explore if possible (would also be more “expensive” as the OTC would be paid in stables / ETH and not PSP).

[enerow]

@0xYtocin

Since $ARB is on Arbitrum and this campaign is running on Optimism, it would add complications for briding and conversion if it wants to be used for voting incentives.

We can bridge + swap at the end of every epoch (every 4 weeks) aligned with the DAO signing sprint of the sePSP revenus distribution.

@0xYtocin

We could explore OTC possibilities with other DAOs like AAVE did in a follow-up proposal to ‘double down’ on these gauge emission perhaps?

If possible, I’m all for it.

@Figue

I believe this could fall within the mandate of GovCo. As mentioned previously, I have no problem in preparing the payload and providing the required analysis.

Sounds great

@Figue

If the goal is to create a new sustainable way to incentivise liquidity, my advice is to keep the farmed AURA and redistribute the BAL & OP to sePSP2 holders to increase the lock rate. This way the cost of the campaign progressively lowers until a point where external incentives aren’t needed anymore.

I’m aligned with that.

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About the redistribution, what should we do?

1. Buyback $PSP with the BAL & OP at the end of each epoch and reward stakers in sePSP1
2. Swap BAL & OP for $ETH and add them the current distribution system
3. Distribute BAL & OP

[Figue]

@enerow

• Buyback $PSP with the BAL & OP at the end of each epoch and reward stakers in sePSP1
• Swap BAL & OP for $ETH and add them the current distribution system
• Distribute BAL & OP

Either 1 or 3, I feel like 2 is overkill. The first option is extremely interesting as it creates an interesting flywheel into tokenomics.

[enerow]

@Figue

Either 1 or 3, I feel like 2 is overkill. The first option is extremely interesting as it creates an interesting flywheel into tokenomics.

Great

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Now last point if think we need to agree on is :

1. Do we use only $PSP to bootstrap the voting power (vlAURA)?
2. Do we use the $ARB airdrop?
3. Do we use both $PSP+$ARB to ‘double down’ on these gauge emission?

---

I think that if we chose to double down PSP+ARB (3) then we’ll have to go with the buyback psp+distribute in sePSP1 (1) the rewards to stakers to compensate the selling pressure.

[Paradigme]

Hi guys,
Sorry, I’m late on that interesting proposal.

Thank you for clarifying a lot the proposal with the last discussions, that was helpful.
If I had to give my opinion about the last questions @enerow asked, I would go for:
“Buyback $PSP with the BAL & OP at the end of each epoch and reward stakers in sePSP1”
&
“both $PSP+$ARB to ‘double down’ on these gauge emission?”

I hope we can vote this proposal soon.

[Albist]

Except if there is a use case already identified for $BAL or $OP,
I’m in favor of doubling down (as long as we can regarding the cap mentionned here) + buyback for staker distribution. (while AURA getting locked)

It’s great imo if GovCo can be the managing organ for the assessment of this strategy.

The subject is becoming clearer!

[enerow]

@Albist

as long as we can regarding the cap mentionned here

Cap is 25K $OP per week which is ~$36K at today price ($1.45), so we’re good in the case we grant $10K in $PSP + $10k in $ARB per week.

[stikers]

Let’s go with that. Double down. Buyback sepsp1

[enerow]

It looks like we have a consensus here @jeffery , temp check is over, I think you can update the proposal with the new data and launch the vote on Snapshot as we are Tuesday :

• Allocate $10K in $PSP + $10K $ARB weekly
• Swap BAL + OP rewards to buyback $PSP, and distribute it to Stakers in sePSP1 at the end of each epoch.

[Paradigme]

It’s been a week… What are we waiting for?

[agrosso]

Hi everyone, sharing some thoughts on the proposal before going live:

@enerow

Allocate $10K in $PSP + $10K $ARB weekly

For budgeting purposes, do we want to set a limit for both PSP and ARB? Maybe x months? Would this run until ARB funds run out?

@enerow

Swap BAL + OP rewards to buyback $PSP, and distribute it to Stakers in sePSP1 at the end of each epoch.

Distributing an additional sePSP1 to all stakers would mean developing a new distribution process, as the current ones are for wETH distribution (rewards) and sePSP1 only for gas refund participants.
This might take time, and I think we should consider the dev resources needed to do it vs the amount that will end up being distributed (reminder: Aura will have OP incentives for a limited time).

From an operations perspective, resource and time wisely, I think it would be better to include the earned OP and BAL into the epoch rewards flow, having Mimic convert them to wETH and distribute to stakers as the rest of the protocol fees

[enerow]

@agrosso

For budgeting purposes, do we want to set a limit for both PSP and ARB? Maybe x months? Would this run until ARB funds run out?

I think we can double down with ARB ($10,000 PSP + $10,000 ARB) until OP incentives are stopped or until we run out of ARB (should last between 5 to 6 months depending on the price of the token), whichever comes first.

@agrosso

This might take time, and I think we should consider the dev resources needed to do it vs the amount that will end up being distributed (reminder: Aura will have OP incentives for a limited time).

What’s a shame is that the PSP buyback, lock and distribute in sePSP1 idea was intended to mitigate the $10K PSP initial sell. But you make a point here, thank you.

@agrosso

From an operations perspective, resource and time wisely, I think it would be better to include the earned OP and BAL into the epoch rewards flow, having Mimic convert them to wETH and distribute to stakers as the rest of the protocol fees

If we don’t have any other easy way to buyback and distribute in sePSP1, then I think distributing it directly in ETH with the current system using mimic to automatically convert it would be the best option.

[stikers]

The important thing is to launch this proposal quickly to take advantage of the incentives.

So if you think it will be quicker to distribute wETH then…
Let’s get started.

[Albist]

Buyback would have been better but if not possible, let’s go for WETH.

Also agree to follow the OP incentives for the doubling down strategy using ARB treasury.

[Paradigme]

Thanks @agrosso

Go for ETH then

[json]

Thank you everyone for your feedback on the proposal! Unfortunately all of the available AURA for OTC has been recently drained by Aave so that they can support their new stablecoin, GHO.

I believe we landed on the following additions:

• Allocate $10K in $PSP + $10K $ARB weekly until OP incentives are stopped or until Paraswap runs out of ARB
• Swap BAL + OP rewards to wETH, and distribute it to Stakers in sePSP1 at the end of each epoch.
• GovCo will handle preparing payload and providing program analysis to ensure sustainability and profitability (figue)

[jeffery]

Nice discussions! Thank you everyone.