PSP-BPΔ1: ParaSwap DAO budget for 2022

It may not look like it, but the whole part about managing the liquidity of the protocol is extremely important.

A protocol with good liquidity that even has its own liquidity is a healthy protocol.

I understand the rush for the obvious but every point is important

4 Likes

So, if we reach to Dec 31 2022 we have total 237.750.000 x 2 = 475.000.000 Circulating Supply?

Kudos to everyone that contributed towards the creation of this work. The budget covers pretty much everything.

However, instead of simply suggesting the unallocated fund for farming, we could have a specific budget for our treasury growth strategy. With a specific budget and a good plan in place such that PSP holders are rewarded either by token price appreciate or dividend distribution, there will be more reason to hold psp.

I also think marketing and partnerships are important but why not separate the two. Marketing itself is a broad topic that deserves a separate and specific budget and mostly require a recurrent expenditure unlike partnership which could for instance come inform of a loan or crowdfunding.

5 Likes

Thank you very much for your 2 cents! It’s obvious that you care about $PSP, however, I find your last points very concerning personally.

Wouldn’t buying tokens straight away and then ask a vote on keeping them be completely defiant on the point of a DAO? That would mean treasury funds being used for approval without even knowing if the organisation wants them. What happens if the tokens purchase collapse in value between the illegal purchase and the vote? Putting forward a proposal literally tomorrow would also defy the point of discussion , and go against PSP-IP6.

Additionally, this urgency is all reliant on this being a 'pullback ',but there is no easy way to predict market conditions. I hope you are right and we return to bull conditions soon, but we should not be rushing something as important as our budget purely on speculation, personally. After all, what if we rush these product acquisitions, and then the market crashes even further?

Personally, I believe that each one of these sections has an important place in the ecosystem, and each one will help with the protocol growth in a sustainable way. The Convex purchase is also being allocated one of the most generous pools, so hopefully that eases some of your concerns!

From what I understand , the farming for unallocated budgeting is simply a suggestion on what could be done with the unused capacity. Assuming this proposal passes, the remaining 32% could be used for anything the DAO approves of, from dividend distribution (would love to hear more on this!) to entering new protocol voting wars.

For the non-recurrent expenditures of partnerships, I believe the budget from the grants section would be more appropriate? Funding cooperations for more permanent implementations seems to fit right into its scope!

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By dividend I think if the proposal passes, we could create another proposal that specifically discuss treasury strategy.

The strategy will involve activities that are aimed at increasing the treasury worth. Gains acquired from such activities can then be distributed in form of dividend for the community. Since the anticipated profit will not come inform of PSP, it’s distribution cannot create any sell pressure.

Such profits could also be used to create a peg price for psp such that if and when the pegged price is broken the profits is used to buy back psp for the DAO thereby reducing the supply and countering the sell pressure. The purchased token automatically gets added to the treasury and could be used to increase the budget for the next quarter or simply kept separate for future DAO use. Such token could be gradually released back into the market via direct sales during bullish market cycle or simply used for other purpose that the DAO decides.

I don’t know if I’m able to articulate the idea properly.

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Fantastically done, I was getting worried for a second there during the positive slippage thread but I’m glad to see the Team has been working on a detailed plan to use emissions for further growth.

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Thanks for your feedback!

There is 45M PSP allocated to buy CVX tokens and enter the Curve war, so yes it involves a little dilution as the treasury mostly hold PSP for now, but these tokens will generate yield for the treasury.

Same for the liquidity mining part, the goal is to spend a lot less next year than this one

Hey everyone !

After taking every feedback into account, here is a reviewed proposal of the Paraswap budget :

As a reminder, the idea would be to vote on the budget for the next 3 months (the green part) and then reevaluate before voting the next ones.

What are the modifications ?

  • BP 1-4: Gas refund: From 11M PSP (4.63%) to 30M PSP (12.95%)
    Reevaluation of this budget with the comments on BP 1-4 and the ones on the gas Refund topic.

  • BP 1-6: Grant program: From 6.05M PSP (2.54%) to 5.5M PSP (2.31%)
    Small reduction to increase other budgets

  • BP 1-7: Marketing & Partnership: From 3.85M PSP (1.62%) to 4.95M PSP (2.08%)
    Increase of the marketing and partnership budget to take into account the requests for professional marketing team expenses (the salary of the team can be included into the contributor part if it’s a long term partnership)

  • BP 1-8: Contributor budget: From 8.8M PSP (3.7%) to 5.5M PSP (2.31%)
    Reduction to fit the current needs of the DAO (upcoming research pot on this topic)

The other BPs remains unchanged.

What expense will be voted on Snapshot ?

Once the community come to agreement on the budget, i’ll post a snapshot propopsal to vote on the potential DAO max spending for February, March and April 2022, so 56.78M PSP (23.88% of the yearly budget)

13 Likes

Full support Dydymoon, I will vote “Yes” to this budget distribution! :blush:

4 Likes

Perfect, I will also vote yes

2 Likes

I cannot think of any inadequacy in the current allocations. I would vote yes to all the budget proposals.

1 Like

Thanks for your updates, I will vote Yes.

1 Like

One more yes, thx for the work and let’s move on! :slight_smile:

2 Likes

Looks perfect to me, definitely another yes on this proposal.

1 Like

PSP-BPΔ1: ParaSwap DAO budget for 2022

Key words

Treasury, Budget, Strategies

Simple summary

The goals of this proposal are to establish a budget for the $PSP holdings of ParaSwap DAO unvested over a year. To do this, it seeks to lower the current staking rewards, rebalance the risk vs LPs, and establish upper spending limits for other DAO spending categories. This proposal will be split into 8 sub-proposals to validate every line of the budget.

Context

Over the first year, ParaSwap DAO will receive 13.5% of the total supply, for a total of 270M $PSP. This proposal will propose a potential repartition of the ecosystem reserve unlocked.

To make the calculations easier and start claiming the 2nd year allocation in 2023, the 270M will be used from November 2021 to December 31st 2022, so 13.5 months.

The staking reward budget represents 50% of this funds at the current rate, which is why this text will propose a reduction to help the DAO expenses to be more sustainable, and reduce the selling pressure on $PSP price in the long term.

This proposal aims to set upper spending limits for different budget categories, and does not mean that all of the allocated $PSP will be immediately spent on the proposed sub-sections.

The only BP’s that will be immediately applied will be BP1-1 and 1-2, as they are affecting already existing DAO programmes. All other ones will hinge on further viability discussion and votes to ensure further deployment.

Goals

This proposal will be split into 8 sub-proposals that will be submitted with specific proposals on each subject :

  • PSP-BPΔ1-1. Reduce the staking rewards budget (33M $PSP, 13.88% budget)
  • PSP-BPΔ1-2. Increase the liquidity mining DAO budget (42.58M $PSP, 17.91% budget)
  • PSP-BPΔ1-3. Curve war & $CVX budget (45M $PSP, 18.93% budget)
  • PSP-BPΔ1-4. Gas refund program budget (30.8M $PSP, 12.95% budget)
  • PSP-BPΔ1-5. Protocol owned liquidity (POL) budget (11M $PSP, 4.63% budget)
  • PSP-BPΔ1-6. Grant-Micro Grant budget (5.5M $PSP, 2.31% budget)
  • PSP-BPΔ1-7. Marketing & Partnership budget (4.95M $PSP, 2.08% budget)
  • PSP-BPΔ1-8. Contributors budget (5.5M $PSP, 2.31% budget)

This repartition keeps a significant part of the treasury unallocated (59.42M, 24.99% budget) that could be used to farm while including all the points above.

Voting options

  • Accept the potential max spending of 56.78M PSP for February, March and April 2022
  • Refuse the potential max spending ok 56.78M PSP for February, March and April 2022
  • Abstain

PSP-BPΔ1-1: Reduce the staking rewards budget (33M $PSP, 13.88% budget)

Key words

PSP staking policy

Context

As mentioned in the previous $PSP-IPΔ5 discussion, the 5M $PSP/epoch was a choice made by the team to bootstrap the staking module, but the goal was always to reach a more sustainable amount.

Goals

  • Lower the $PSP rewards to 1.5M $PSP/epoch

Rationale

If we lower the rewards from 5M to 1.5M $PSP/epoch, it would decrease from 44,4% to 13.88% of the yearly budget allocated for staking, which would leave more $PSP for the following points. With 1.5M/epoch, the APY would still be around 25%, which remains higher than most of the staking rewards on other projects.

On January 31st, the DAO already spent 25M $PSP for only 5 epochs, but we could lower it from the month after this proposal passes, which would create a yearly budget of 33M $PSP (from february to december 2022).

PSP-BPΔ1-2: Increase the Liquidity Mining DAO budget

(42.58M $PSP, 17.91% budget)

Key words

Liquidity mining, Rewards, Liquidity pools, Budget

Context

Several liquidity mining programs have already started including Sushi/Balancer Mainnet, and QuickSwap/Cometh Polygon.

Sushi is paid by the DAO every week, and Balancer is also paid by the DAO, but all the rewards have already been sent to the contract. On January 31st, the DAO have spent 3.75M $PSP for these programs.

Cometh and QuickSwap rewards have been started by the ParaSwap foundation, which explains why there is 0 $PSP for the next 3 months on the tab. However, the DAO will need to fund it once the first program ends.

Goals

  • Increase yearly Liquidity Mining to 42.58M $PSP max
  • Start Liquidity Mining programs on BSC, Avalanche, Deversifi, Fantom and maybe other chains

Rationale

This proposal increases the Liquidity Mining program to 42.58M $PSP: 17.91% of the yearly budget split as detailed below :

Ethereum (17.33M $PSP, 7.29% budget)

The budget for the first quarter on Sushi (LP 50/50) is 5M $PSP, so 20M yearly. I propose to reduce it to 12M yearly (5.05%), so 500K $PSP per epoch could start mid-March.

The budget for the first quarter on Balancer (LP 80/20) is 1.25M $PSP, so 5M yearly, and considering that the Balancer pool could have more risks because of the safety module, we could easily increase the rewards to 5.33M $PSP yearly (2.24%), so 250K per epoch could start in April.

For the sidechains, I propose to allocate 1.65M $PSP yearly for each pool, and adjust every 3 months depending on the activity on each pool. Another interesting approach could be explored in a few months by creating gauges to start a $PSP war.

Polygon (5.45M $PSP, 2.29% budget)

As mentioned above, Cometh and QuickSwap rewards programs have been started by the ParaSwap foundation, but the DAO will need to fund it after 3 months. A Balancer 80/20 could be created and can be useful if we want to implement the safety module on Polygon in the future.

To maintain 1.65M/pool and because Polygon pools are important, the proposed budget is 200K $PSP/ month during 9 months for QuickSwap and Cometh pools, and 150K $PSP/month for all other pools, on sidechains/L2s.

Binance smart chain (3.3M $PSP, 1.39% budget)

There is a discussion with PancakeSwap and ApeSwap on BSC to create $PSP pools. There is currently no way to create a 80/20 LP on BSC.

The proposed budget is also 150K $PSP/month for each pool.

Avalanche (3.3M $PSP, 1.39% budget)

If the community votes to deploy $PSP on Avalanche, we will start a discussion with Trader Joe and Pangolin DEX to create $PSP pools. There is currently no way to create a 80/20 LP on Avalanche.

The proposed budget is also 150K $PSP/month for each pool.

Fantom (3.3M $PSP: 1.39% budget)

ParaSwap is now deployed on Fantom, so we will start a discussion with SpookySwap and Beets.fi to create $PSP pools. The SpookySwap pool would be a 50/50 LP and the Beets.fi pool can be a 80/20 LP as it’s a Balancer fork.

The proposed budget is also 150K $PSP/month for each pool.

Deversifi (1.65M $PSP, 0.69% budget)

According to the PSP-IPΔ9, ParaSwap DAO made a loan of 2M $PSP to seed a $PSP/ETH pool matched with ETH owned by Deversifi. If the DAO gets 50% of the LP, we could avoid to stake it, ask Deversifi to do the same, and add a reward budget on this pool too.

The proposed budget is also 150K $PSP/month for the pool.

Other chains / Future $PSP pools (8.25M $PSP, 3.47% budget)

As there are many chains where ParaSwap isn’t deployed, we could add an additional LM budget starting in March. The proposed budget is 750K $PSP/month.

PSP-BPΔ1-3: Curve war & $CVX budget

(45M $PSP, 18.93% budget)

Key words

Curve War, Incentives, Gauges

Simple Summary

This proposal is about diversifying the treasury by allocating 45M $PSP over the next 3 months to acquire $CVX that will be locked and used to create a gauge on Curve V2 for a future $PSP/ETH pool, and influence the rewards by voting. Until then we could also accumulate more governance power and/or yield with bribes earned.

Context

The rewards on Curve are changing every week, and are decided by votes, so we need an important voting power to influence the vote in favor of ParaSwap DAO. As a vlCVX (CVX locked) control several veCRV (CRV locked) but in the future, also other ve tokens like FRAX, we propose to start accumulating voting power with the DAO quickly.

More informations on the Curve war can be found here:

Goals

  • Diversify the treasury
  • Accumulate governance power
  • Earn additional yield
  • Use the CRV war to influence CRV rewards on future $PSP pools

Rationale

@Dydymoon will be working on a full proposal with @Jeanbrasse and @tokenBrice to explain all the details, as this proposal is only to vote on the total budget allocated.

However, here is a list of the possible ways to accumulate CVX:

  • Gnosis auction
  • Balancer LBP
  • PSP leverage
  • Uniswap V3 pool
  • UMA KPI Options
  • ParaSwap DAO bonds

The proposed budget is 15M $PSP/month for the next 3 months.

PSP-BPΔ1-4: Gas refund program budget

(30.8M $PSP, 12.95% budget)

Keywords

Gas refund, staking, Front-end upgrade, Smart contract development, Marketing & communication

Simple summary

This proposal is about deciding the budget for the $PSP-IPΔ11, the discussion can be found here : PSP-IPΔ13: Gas refund for Stakers

Context

The idea is to reward users based on their total staked amount on ParaSwapPool and Safety Module (and other future staking programs).

Rationale

I propose to allocate 30.8M $PSP yearly to the gas refund program. The discussion about this proposal is still up, you can participate and discuss the features and restrictions using the link above.

The proposed budget is 2.8M $PSP/month allocated to the gas refund program.

More information here : https://gov.paraswap.network/t/psp-ip-13-gas-refund-for-stakers/319/41?u=0xytocin

PSP-BPΔ1-5: Protocol owned liquidity (POL) budget (11M $PSP, 4.63% budget)

Keywords

Protocol owned liquidity

Simple summary

The liquidity mining is not sustainable long term from a protocol treasury perspective. We could explore the OHM pro option (or another protocol) that would allow the DAO to buy most of the liquidity from the users using a bond mechanism.

Context

If the PSP-BPΔ1-2 is voted, the yearly budget for Liquidity Mining is 16.67%. By adding 4.68% for this program, we could probably reduce the Liquidity Mining by a lot next year, considering that most of the liquidity will be held by ParaSwap DAO.

Goals

  • Increase the $PSP liquidity owned by the DAO
  • Reduce the liquidity mining programs in the coming years

Rationale

There will be a detailed proposal about this program, as this one is only to vote on a budget.

It can be seen as a double spending with the liquidity mining budget, but the idea would be to reduce or stop the incentives in the next few years.

The goal would be to start it in mid February/early march, which is why there is 0 $PSP allocated for the first month on the table.

Means

The proposed budget is 11M $PSP yearly with a distribution of 500K $PSP/epoch for the bonds rewards.

PSP-BPΔ1-6: Grants budget

(5.5M $PSP, 2.31% budget)

Key words

Community involvement, Rewards, Improve ParaSwap decentralization

Simple summary

This proposal is about to start a Grant program to fund ideas submitted by the ParaSwap community with a focus of bringing more dev skills to the ParaSwap DAO. It could also be used to reward community members that handle a proposal from the idea to the execution with micro grants.

Context

This proposal will help support the community work and external projects building on top of Paraswap.

Goals

  • Provide resources to fund community ideas/projects/involvements

Rationale

ParaSwap DAO can allocate 2.31% of the yearly budget to fund growth and community initiatives with a grant program. Starting a grant program can help increase the involvement of the community and can be very useful to sponsor or participate in projects, integrations and initiatives from DAO members.

ParaSwap DAO could elect a grant committee that would check if the requirements for the funding requests are met and help the members/projects to create the proposal.

Depending on the feedback and votes on this proposal, there will be a full proposal about the Grant program.

Means

The proposed budget is 500K $PSP/month max:

PSP-BPΔ1-7: Marketing & Partnership budget

(4.95M $PSP, 2.08% budget)

Keywords

Marketing, Contests, Events, Partnerships

Simple summary

Allocate a marketing monthly budget handled by a community multisig.

Context

Creating a budget dedicated to marketing and partnerships would allow the DAO to move quickly on small expenses.

Goals

Rationale

This proposal is about creating a budget easily accessible by the community. This could concern several points :

  • Twitter contests. Increase the followers of the project and kick start a partnership to link two communities (for example, a twitter contest “Like, follow & RT and try to earn X $PSP” or “ Follow X Project and ParaSwap, Like & RT x tweet and tag friends” etc
  • Trading contests. We could do trading volume contest on new chains for example, and reward with $PSP
  • Rewards for AMAs. By creating partnerships with other projects, we will participate in AMAs, events and this is good occasions to rewards the community for the best questions
  • Partnerships with other projects. It can be useful to use part of this project to start partnerships with other projects by creating short term incentives

The community members on the multisig should be decided with a DAO vote.

It might be worth considering low expenses handled by the multisig without a DAO vote, for example below 3000$.

Higher expenses should follow the regular DAO process with a Snapshot vote.

Means

The proposed budget is 4.95M $PSP yearly with a distribution of 450K $PSP/month maximum for the marketing budget.

PSP-BPΔ1-8: Contributors budget

(5.50M $PSP, 2.31% budget)

Key words

Reward involved contributors

Simple summary

Make ParaSwap DAO autonomous with salaries for involved contributors

Context

Several types of contributors are working on ParaSwap DAO: Scribes, Moderators, Ambassadors, Delegates… The goal of this proposal is to reward each one of them to decentralize the DAO at the maximum.

Rationale

This proposal is different from the grant program which will reward punctual help on a dev side, or a project building on top of ParaSwap, as it will reward active contributors.

7 Likes

Nice work !
I need to read that again Monday.

3 Likes

Can’t wait to vote yes on this very well crafted budget.

3 Likes

Snapshot vote is up! So excited to finally see this being voted on, it’s been amazing seeing so many DAO members collaborate to make this doable :fire:

https://snapshot.org/#/paraswap-dao.eth/proposal/0x5e36154da4445276010f7ebf472eae65d4adcfd8c09c5ebd38522be740e4bb71

4 Likes

Magnificent!
I’m new in the défi and to in the crypto world but I’m sure I’m in the right place to grow and learn from the best.
This community is incredible, it is so rich in teaching that I grew up quickly.
Thank you for your involvement.
For my part, I continu my learning in order to be more involved in the DAO PARASWAP.
:muscle: :fire:

2 Likes

Hi guys,

Copy/pasting my feedback from Discord as this seems to be a better place to push it.

"If there is any budget to be put together it needs to be focused on allowing ParaSwap to have higher volume, increase marketshare and survive over the long term.

  1. POL allows to drastically reduce emissions

  2. The current staking rewards system needs to be rethought and redesigned

  3. ParaSwap as a DAO needs to attract the best and brightest in the space (think what Lido did for example) and any grants budget would need to be focused on:

a) Technical objectives/research: in the grand scheme of things there are many pieces that need to be built (ie. how to approach making the protocol completely trustless and permissionless, what tech? how? what time horizon?). There are some great tech people in the space, we are not focused on attracting them, we should be focused on having them research some of our pain points whenever possible. It’s also good for the project’s reputation (can be seen as indirect marketing).

b) Tokenomics design: everyone thinks they are qualified to work on this topic but the reality is that a few understand how to design incentives and align protocol interests with token holders’. Let alone modelling different approaches/outcomes. Again, the best and brightest never had the opportunity to look at $PSP. Putting aside $PSP price, this can make or break the product as a whole over the long term (see Curve vs Uniswap and how Curve is leveraging its tokenomics to get more and more market share).

c) Building an ecosystem around Paraswap: a key piece for any protocol is it’s ability to have an ecosystem built on top of it, I think Paraswap should strive for the same and encourage others to build on top of it’s tech/leverage it in maybe new ways (for example aggregating prices for other primitives than “simple” tokens - could be NFTs, derivatives, etc.).

A budget needs to be built based on objectives that are clearly defined and not on the availability of funds and the urge to spend them.

Maybe the first discussion that needs to happen is to define what objectives the Paraswap DAO needs to achieve and how tokens could be spent in that direction. Voting a budget without knowing what it will be allocated for and the full rational + expected results seems a bit rushed

I would also like to add that it’s great to see all of the ideas and discussions, it is positive and means people care about the project, however it might be worth it to take into account the implications of something like this (a budget proposal to spend a lot of the DAO’s unlocked PSP).

One doesn’t decide how to spend 10-20-30m$ just like that without having a strong rational backing each decision. Given the amounts at stake, the DAO has the means to attract talented professionals who could execute on the different topics and actually create immense value.

Paraswap raised about 6m$ to date which covered all of the expenses from 2020 till today.

3 Likes