PSP 2.0 Renaissance - Social Escrow, Fee Redistribution, and Fairdrop

After my first reading of the proposal I thought it was potentially not totally a bad idea, but let’s face it, the debate around the fairdrop (especially on discord) is fading away the real true innovations behind this proposal.

Hate around PSP Failed Airdrop was one of the worst marketing bad buzz of the last cycle, It took almost 1 full year to gradually fade away. Now that paraswap’s fundamentals are finally taking back the lead, why risking it all by re-launching another airdrop that will be controversial no matter what the filtering recipe is.

I think that there are better ways to use the DAO’s treasury to attract and reward news users.

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Great idea, we could also incentivize stakers using this “buyback & stake” option with an additional (small) PSP reward.

I also agree, only stakers should be rewarded for their commitment.

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Hello and congratulations on the work done.

I understand the interest in favouring sePSP2s but the boost seems sufficient. Why should only those who migrate to sePSP2 receive a full refund of the migration gas costs? I think that all stakers should be able to migrate without cost.

Requiring the claim to be made within two epochs may make the claim unprofitable for small amounts staked according to the gas price. This puts small holders at a disadvantage, especially since only the Ethereum network is available at the moment.
Why the short delay? And why give the protocol a chance to recover them if it is decided in the first instance that the protocol will have 20%?

I totally agree that in addition to encouraging people to use the protocol, we should also bring them back to the DAO, if DAO is still the goal.
I would add to the roles proposed by @disiaque.eth to consider (to a lesser extent) the people who vote for the various proposals.

100% agree, how is it in the interest of the protocol for a user to keep his PSP liquid.
Those who have staked to favour PMM or provision liquidity are rather the ones who should benefit from a boost. If this boost is really necessary.

100% I’ve never been convinced by the usefulness of a new airdrop, fair or not, and unfortunately this topic is taking over the rest of the debate.
As it is announced on twitter, and as a good part of the people stop at the headlines, fairdrop is already expected and will create disappointment whether it is voted or not.
Why shouldn’t the stakers have one too? Why this or that? There will always be dissatisfied people.
It will take some time for this fairdrop to be forgotten.

The work you have done to reorganize the staking system, the $PSP issue and the sePSP are in themselves PSP 2.0 and did not need more for my taste.

Finally, you probably meant six-month (6 epochs) or 3-month (3 epochs), with the new 1 Epoch = 4 weeks rule right ?

I will follow the discussions carefully on this forum which is finally getting some activity again!

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I disagree with the fairdrop because it will further devalue the price.

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To follow up on my first message. Can we imagine a more dynamic Paraswap Boost Score with an exponential function concerning lock time which would be a global boost that could decrease linearly over time. The advantage is to encourage people to lock their tokens for as long as possible by offering an exponentially larger boost.

CodeCogsEqn(2)

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As mentioned in my first post, I fear that the arbitrary system is being gamed by some actors in the ecosystem. Here is an idea for a formula that I thought of:

CodeCogsEqn(3)

Exemple with $1.000 of stkPSP:


Exemple with $1.000.000 :

The aim is to reward those who participate by increasing the difficulty of decreasing the boost while largely rewarding those who participate the most according to their ability to participate. Unlike tiers, which are unfair and arbitrary, a curve makes it possible to be more fair and harmonious.

Below is the projection of an increase or decrease in the value of sePSP relative to a volume x:


I would add that the boost points will be burned linearly over 6 epochs but can be accumulated from one epoch to the next.

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Hello,
I appreciate the work done on this proposal, it’s neat to see PSP v2 coming to fruition. However, the process is unnecessarily confusing, as this proposal is actually a seven-in-one:

  1. Introduction PSP v2 Social Escrow + staking revamp + fee distribution
  2. Introducing the Gov Committee
  3. Changes to quorum and required votes
  4. Introduction of the Express Proposal Framework
  5. Gas refund renewal
  6. Fairdrop
  7. Pool4 & 10 rectification

As suggested by others in the thread, I’d recommend splitting the discussion & proposal into 7 clearly focused threads that will help facilitate the discussion and enable users interested in only one of these topics to easily get involved too. Splitting the Pool4&10 Rectification proposal apart was healthy, now let’s trim down the rest of this massive beast so we can accurately discuss the topic at play here today: the PSP v2 model.

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@tokenbrice This seems to me to be a nice idea.

When each discussion has found a consensus, we can gather the proposals for a global proposal of the 2.0?

I don’t know if deadlines have been announced? There is no point in rushing but there is no point in getting bogged down in endless revisions.

Knowing that it is very likely that adjustments will be made after the first few 2.0 episodes.

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My understanding is that Voting Power = ParaBoost Score, formula below.

If I’m right, @0xYtocin should probably update the image, replacing “Voting Power Boost” by “ParaBoost” so there is no misunderstanding.

Very good idea, let’s separate the subject into 7 parts for better visibility and better understanding :+1:

The voting power can’t use ParaBoost for 2 reasons:

  • It can’t be tracked onchain
  • it’s reset every epoch

(Its my first ever comment in any gov)

Please do not forget about the loyal users who have been staking psp for a few months, we also want to be appreciated and receive some fairdrop, we trusted you so please reward us for the fact that even when the price has dropped by 98%, we still support the project by staking/swaping psp tokens

Enjoy.

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do not forget about the loyal users

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Ok, so like @dydymoon said, it is unclear what is accountable for Voting Power and what is accountable for ParaBoot Score .

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Staking will be used for voting power & ParaBoot for Protocol revenue share.

If we take these examples:

A user stakes 100k PSP, trades $100M, brings $100M volume through referrals
ParaBoost = 192k PSP ( 100k *1.6 * 1.2 )
Voting Power = 100k PSP

A user stakes 100k PSP + ETH (20%) in sePSP2, trades $100M, brings $100M volume through referrals
ParaBoost = 480k PSP (100k * 2.5 * 1.6 * 1.2)
Voting Power = 250k PSP ( 100k * 2.5 )

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OK, thank you for the clarification!

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I’m so thrilled to see this proposal has gathered so much engagement! The ideas and discussion that I am seeing are absolutely invaluable, and makes me even more confident that the final proposal will be amazing. I wanted to share a couple of my thoughts on some discussion ideas to be able to decide how to best go forward:

Fairdrop

After reading through most reactions to the fairdrop, I think we can all agree that it should not launch in its current state.

Since the final Fairdrop criteria were meant to go on a separate vote to be approved anyway, I suggest we create its own dedicated thread to discuss it further

The idea of the fairdrop was to invite members that initially felt excluded from the DAO to rejoin the conversation, but alternative solutions can be worked on that the community would agree more with!

On separating discussion

As already mentioned, I agree that it is best to separate the discussion of the fairdrop, as both that one and the GovCo votes were meant to be put in another vote in the future. However, any further splitting might un-intuitively lead to even less productive discussion.

One point that I find is important is the atomicity of these sections. Separating the discussions makes sense if some of these sections can pass a vote while others do not (such as the fairdrop and GovCo member elections), but all other sections are linked and rely on each other. Without the fee redistribution, there is little point in the ParaBoost system or staking mechanisms. Without GovCo the voting changes, sePSP will not be the voting token of choice, and we will not have a framework to handle future proposals that could occur from introducing such a major system.

Offchain boosts and sePSP adjustments

The suggestions on how to make the sePSP system more balanced and better distributed are amazing, so thank you to everyone who has suggested ways to make them even more fair (shoutout to @enerow , @xtatik and @maxax , go check their posts!). You all raised very good points that the formulae could easily be adjusted to be more socially oriented.

Regarding the contributor boosts, that is something that was on the original draft of Social Escrow. However, in the end I arrived to the same conclusion as other DAO members, that these contributions are better suited to be handled on the Social DAO level rather than the PSP Protocol level.

Fee redistribution should be as easy to decentralize and as trustless as possible, which means it is best to only account on-chain quantifiable variables. Anyone should be able to recalculate the distribution on their own end. Because of this, it might be better to leave these contributions to a system on the DAO.

sePSP2 and other clarifications

Finally, here are some miscellaneous clarifications that I thought are worth mentioning:

  • sePSP2 will receive a 2x value increase in both voting power and the ParaBoost. This is the only boost that will be applied on both levels, with all other ones being only concerning to fee redistribution. This is to further incentivize the contributions of liquidity
  • A zk badge was considered for ParAccounts, but ultimately they would not have been beneficial. This is because all the data is available on-chain. The main purpose of the ParAccount is for ease of use of users who wish to separate these activities but want to accumulate their boost in one ParaBoost.
  • The window to claim with a small delay is being suggested to reduce abuse of the system and reward users that are actively engaging in the protocol. The fee situation is a valid concern, but its going to be resolved once we expand 2.0 to go full multichain. A roll-up claim function could be considered.
  • Finally, adding a flat 0.1% fee to all trades through ParaSwap sounds like a good idea, but considering that the main purpose of the protocol is to deliver the best prices, it would render us too uncompetitive. Other forms of revenue accumulation can be discussed once PSP 2.0 is accounted for.
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Doesn’t participation in governance votes fall within this framework? I think that the interest of the protocol is to involve as many holders as possible.

Will multi-chain staking be implemented at the same time as PSP 2.0?
Today small stakers are on Ethereum, so they will be disqualified while waiting for a possible rollup or they will have to pay bridge fees?

We can roll out new chains quickly after the launch

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It’s easy to game, and I am not sure how efficient that will be… The goal of PSP 2.0 is to bring more volume & users. The incentive to participle in governance is natural because each participant will be behind the success of the protocol.

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Truly happy about the platform changes. Im a hardcore psp user and got left out of the airdrop. Not gonna be a sour loser. Just kept using it because platform is so good.

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