First off, before I dive into this proposal I just want to first thank everyone for their support to date - the team and I have been blown away by the amount of help we’ve received, from our super supportive investors to our fanatic community (as an aside we still need a name to call ourselves, I’m almost tempted to put out a bounty for this) it wouldn’t have been possible without you all.
When we launched we had specified that there would be a large number of tokens that would be dedicated to the ecosystem (see https://docs.perp.fi/getting-started/perp-tokens). In this proposal we are seeking feedback from the community around our plan to tap into these tokens in order to help supercharge growth.
We’re currently almost at 1 billion dollars in trading volume (yes with a B, also check out this if you haven’t already, there’s a nice prize for the trader that does the magical 1B trade: https://twitter.com/perpprotocol/status/1353708175829069825) and we’ve been hitting on average 30M in trading volume daily. All of this has been achieved to date without any incentives.
We have a very big goal in mind that we want to hit within the next 6-12 months, and that is to be the top decentralised derivatives exchange. We want to 10x our daily trading volume from 30M to 300M a day - and we believe this can be done.
Given we have already been hitting significant volumes without incentives, you can imagine what it will look like when we supercharge the exchange with them.
We are asking for the community to unlock 20.5M PERP which are to be spent in the following ways:
- Rewards: this includes both transaction mining and staking
- Strategic Partners: continue to bring on key strategic partners that will help grow
- Bounties program: a continuation of https://bounties.perp.fi/ in which we are able to build out the PERP ecosystem rapidly
- DEX Liquidity: provide greater liquidity in AMMs such that the PERP token price stabilises
The Ask: 13M PERP
The majority of PERP we expect to be allocated to the rewards program in order for us to hit the lofty goal of 300M daily trading volume. Whilst we don’t know the exact design of the program yet we believe that it will follow some form of experimentation outlined below:
Run some form of pilot experiment over a short period of time to understand the impacts. For example we may run something similar to transaction mining (see early proposal here: https://gov.perp.fi/t/wip-liquidity-mining-rewards/17/5) for a 4 week period and see what impact it has. If we find that it 2x volume then maybe we can double the spend and keep montoring. If it doesn’t work then we can opt to try a different model
Given that 13M PERP is a lot of tokens to be released onto market we are proposing to have a 4M USDC equivalent weekly cap. This was calculated by taking the average weekly transaction volume of the PERP token (not the exchange) which was ~50M. This should limit the impact on the token price itself. Additionally, the plan is to have vesting in place for some portion of tokens that is earned through these rewards.
The biggest key note here is that we actually are trying to not spend everything. This is a super important point as we really want to be experimenting and only doubling down on the winners.
The Ask: 3M PERP
Our current investors and partners have been super supportive to us and have supported us in a variety of ways. We believe that strategic partnerships combined with the other 3 items will be a key pillar to help us achieve the goal of 300M daily trading volume. What we are currently looking for with strategic partners include:
- Deep networks: the ability to make meaningful introductions to both companies and protocols as well as the ability to source and recruit exceptional talent. One key focus area is the ability to bring institutional players and centralised exchanges to the table
- Deep expertise: as you’d expect there are a lot of intricacies in building out a derivatives exchange product - we need as much help as we can get here. From security insights to protocol design we are looking for partners who have deep expertise in these areas
- Proven ability to be a partner: we are looking for partners who have proven to be supportive over a longer time horizon and aren’t just looking to buy and dump in a short time period.
It is important to note here that these strategic partnerships may take the form of OTC sales with a discount however any such sale will always include vesting. This is to incentivise long term thinking rather than short term thinking
The Ask: 500K PERP
As the end goal is to be a fully decentralised organisation, the ideal situation is where there is no concept of a “core” team vs “contributors”. The bounty program is a very good first step to getting there. Passionate contributors to Perpetual Protocol are able to be rewarded such that we are able to retain the best talent in the space.
We have seen so many talented individuals and teams apply for the limited number of bounties we have currently listed and so would love to increase this even more
Again, all bounties will be vested for any amount greater than 10K USDC equivalent
The Ask: 4M PERP
A concern that has been brought up from the community before has been that as staking starts PERP holders are incentivised to move their tokens into staking which will reduce the amount of liquidity available.
We propose putting in 4M PERP into the actual pools themselves such that the liquidity that leaves for staking will be replaced. Depending on which pool we choose (uni, sushi, balancer) the aim is to concentrate the liquidity to provide a lower slippage for those wanting to hold PERP tokens.
For example, if staking starts and we see that 1M liquidity leaves the current Balancer pool and is staked then we could take 1M PERP and inject this back into the Balancer pool, thus stabilising the price and reducing slippage
As part of keeping transparency we will aim to write up a report every 4-6 months to detail how much was spent as well as the impact. We will be asking for support from the community to assist with this given it can be a lot of work!
Aaaaand that’s a wrap. Obviously none of this is finalised yet and so we would love any input from the community to see if we’ve got anything drastically wrong (we’re all human here). We aim to formalise this in a snapshot vote in the next week or so.
Based on community feedback both on the forums, in discord and other chats we’ve decided to update the total ask to 21M PERP (up 500K) and have the distributions as follows:
- Rewards: 13M Perp (same)
- Partnerships and Bounties: 4M Perp (combined strategic partnerships and bounties into one)
- DEX Liquidity: 4M (same)