Proposal : Liquid Stacking Derivative for vePERP

Proposals
1

Background

PERP stacking is ruled by a ve-model. Users locked tokens for 52 weeks maximum to get vePERP, a non transferable token.

Every week vePERP holders receive real yield dividends in USDC.

The problem is to maximize their yield, they need to maximize the lock duration… and so PERP tokens are not available to sell if price goes up or down.

Proposal

The Wise Odyssey Team aims to achieve a Liquid Stacking Derivative (LSD) for the PERP token.

The purpose is to maximize yield for users and liquidity in the same way.

And at the end to attract more PERP in stacking.

Future

On the top of LSD we can build more various products. One example is a “market neutral real-yield vault”.

Open to Feedback

We’re open to feedback from the community and any concerns will be taken into consideration in creating the final version and proceeding to a vote. Please leave your comments and suggestions below!

#Proposed Voting Options

Option #1 - Yes it is a great idea !

Option #2 - No it is useless…

Option #3 - Abstain

2

Thanks for posting a proposal @ParaBellum68 !

I am personally in favor of exploring an LSD for Perp but I do have some questions. Hopefully the community will have more.

  1. Are there any examples of projects of a similar size to Perp launching an LSD? I am curious how the LSD trades relative to the underlying in a real world situation.
  2. Most of the voting power currently lies with existing vePERP holders. What is their incentive to vote for an LSD?
  3. How would voting power underlying an LSD be managed?
3

Hi @LeeKB
For answer you :

  1. I can talk about aura.finance that is the Convex-like for Balancer (Convex is the LSD for Curve in fact)
  2. vePERP holders will gains extra yield (all PERP will be lock 52 weeks and generate max USDC) and liquidity with the pool lsdPERP/PERP in Uniswap.
  3. We have not consider the voting power for now…
    But we can imagine that the voting power can be represented by the staked lsdPERP.

And to answer an extra question : weekly dividends are split between lsdPERP stacker and lsdPERP/PERP liquidity providers :wink:

4

Thanks for the answers.

  1. vePERP holders will gains extra yield (all PERP will be lock 52 weeks and generate max USDC)

This does not seem correct to me. The weekly amount of USDC generated is based on DEX fee income, so if lsdPERP attracts more stakers, vePERP holders yield will actually decrease. So I feel they are unlikely to vote for this type of proposal.

5

You are right. But we are both right :wink:

I speak for the individual retail vePERP holder
With our LSD project he will access to max boost yield AND liquidity at the same time.

You speak for the entire vePERP holder community and you are right to say that if the project attract new holder it will just dilute the weekly USDC yield.

BUT the LSD is not the end of the way !
It is just an essential building block for the development of a market-neutral vault that will generate a lot of volume on the DEX (essentially on PERP contract) and thus bring additional dividends to vePERP holders.