Problem Statements:
In the latest fee-split proposal, vePERP holders were not able to get to vote on options that allowed them to gain higher percentages of fee income greater than 75% due to a contentious debate with the v1 users.
Although the vote is all about better utilization of DAO fee income to reward vePERP and attract new stakers, v1 users were unfortunately being dragged into the conversation due to the limitation of the one-parameter structure of the DAO/vePERP split, which resulted in an unintended conflict of interest between the v1 users and the vePERP holders. The current leading vote result of 25/75 split of DAO/vePERP will result in adding at least another decade to the already long payout time for the v1 users. Having upset/angry users on the platform is really detrimental to the protocol. This artificial conflict of interest between v1 users and PERP holders is unwarranted and can be totally avoided.
Many users have expressed support for the idea of increasing vePERP yield without negatively impacting on v1 users, so that we can really achieve a Win-Win for all parties involved:
Proposed Solution:
Herein, we propose a solution to allow vePERP holders to obtain higher yields than 75% without negatively impacting the v1 users:
If 25/75 split between DAO/vePERP is passed, then:
- Allocate 25% of DAO income to further boost vePERP and additional 17.5% (35% total) of DAO income to v1 Buyback.
- Allocate 45% of DAO income to further boost vePERP and additional 17.5% (35% total) of DAO income to v1 Buyback.
- Allocate 60% of DAO income to further boost vePERP and additional 17.5% (35% total) of DAO income to v1 Buyback.
- Do nothing.
This way, the vePERP yield will be significantly higher to attract new investments to kick start the positive feedback loop:
and at the same time, v1 users payout schedule will still be consistent with their original expectation of around 11 years. Perp can then finally close the v1 chapter and move on to focus on growth.
Benefits:
- vePERP yield will effectively increase from 75% to 81~90% of the overflown fee income, resulting in an accelerated positive feedback loop for Perp.
- Able to increase utilization of DAO income for the growth of the protocol.
- Increased investor confidence as they are witnessing that Perp is honoring the spirit of the previous vote result that takes care of the affected v1 users.
- Serves as an example of a successful governance process to solve problems collectively with the community to achieve win-win results.
- Align interest of the affected v1 users with the vePERP holders, so that all parties are happy instead of fighting against each other.
- The positive harmonious user environment will attract prospective investors on the sideline to put more money to buy PERP.
Implementation Details:
Due to the complication in rewriting the smart contract, we propose that the best way to implement the vote options is to change the following two parameters to achieve the same final results.
“The 3rd parameter”, as coined by the team, is the percentage overflown fee income received by vePERP holders
“The 4th parameter” will be the percentage of DAO income going to v1 Buyback.
Here’re the effective percentages of the fee split for vePERP/v1 Buyback/ DAO for the different vote options, along with the values of the 3rd and the 4th parameters for implementation:
- 81.25% vePERP / 8.75% Buyback / 10% DAO (3rd parameter: 81.25%, 4th parameter: 46.67%)
- 86.25% vePERP / 8.75% Buyback / 5% DAO (3rd parameter: 86.25%, 4th parameter: 63.63%)
- 90% vePERP / 8.75% Buyback / 1.25% DAO (3rd parameter 90%, 4th parameter: 87.5%)
Note: this implementation is not a violation of previous vote results. Due to the complication of implementation, changing the 3rd and the 4th parameters is the easiest way to achieve the same final result of allocating additional DAO income to vePERP. This way of implementation avoids costly rewriting of smart contracts and is by no means a violation of any previous votes.
Summary
This is a prime example of a community-initiated proposal to attempt to solve a problem and achieve a win-win solution for both the vePERP holders and the v1 users. We hope the community can work together to make it happen. Any feedback on the implementation to make it more feasible is welcome. Thank you for your consideration.