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KPI Incentives for Stake Ecosystem Fund

It is important to note that no mater the result of these polls, each request for $STAKE rewards will still require a vote. This is to help guide and encourage the community to work together in requesting rewards in an impactful coordinated way. In a fair way, open, and welcoming way so all projects can feel they are not over reaching or the reverse, being overlooked.

The xDai team and broader Stake community has expressed interest in proposals which seek to increase the liquidity of the Stake token and help to bootstrap xDai native liquidity sources using the Ecosystem fund.

As a member of the 1Hive community working on Honeyswap, the first and still most actively used dex on xDai (by both liquidity and volume metrics), I’d like to present a process to coordinate ecosystem reward incentive proposals in an effort to incentivize xdai with $STAKE from the ecosystem fund.

In conjunction with Raid Guild’s xdai rebranding efforts we should be able to advertise a movement to attract users to xdai.

Incentive could be reaching:

  • dexes (honeyswap, curve, sushi, symm, etc)
  • defi (agave, hedgey, unicrypt, makerDAO etc)
  • nft (nifty, cold, xdaipunks, poap, etc)
  • DAOs (gardens, daohaus, dxdao, TEC, etc)
  • nft games (gustakes, darkforest, etc)
  • attract new product developement
  • Infrastructure/Integrations (tornado cash, giveth, xpollinate, elk, hop, etc)

As a reference we know that most of the reward proposals from polygon were heavily front loaded

  • months 1 & 2 50% of the rewards
  • months 3-12 the remaining 50% equally.

I believe stake community can slightly improve on this approach by adding additionally 2 KPI: TVL and market cap. Adding TVL and market cap KPI can be a way to ensure we don’t see negative sell pressure while attracting continued growth.

The proposed approach would be to distribute based on each protocol independently using a TVL KPI:

  • Month 1 100% rate to bootstrap platform
  • If TVL of $1-10M is achieved then 25% rate
  • TVL of $10-$50M 50% rate
  • TVL $50-$250M 75% rate
  • +$250M 100% rate

The proposed approach for mcap:

Stake Market cap drops below $50M rewards stop

  • $50-$125M 50% rate
  • $125-200M 75% rate
  • +$200 100% rate

Note some of the platforms may not have a clear tvl metric in which case we could use their tokens market cap or just a flat rate for all these types of projects. Which tier each protocol falls into will ultimately be determined case by case and up to the applicant/proposal to make their case for why they are an A, B, or C tier project.

  • A Tier products can apply for $500k
  • B Tier products $150k in rewards (1/4th the tvl KPI required)
  • C Tier $25k in rewards (no tvl kpi needed, just requires projects to match rewards accordingly)

1hive will be requesting an A Tier amount of rewards balanced with the rest of xdai community. $STAKE incentives would be from the defi and DAO/new development bucket for agave lending/borrowing platform, honeyswap farms, and use of gardens to attract growth on stake ecosystem.

Applicants Matching Expectations

It is understandable that there should be a partnership between the projects and the network. It wouldn’t be entirely fair for a long time xdai project which have already given a large amount in rewards over the past year to have to match 1:1. However, It would not be fair for projects on xdai to say “we gave in the past so we shouldn’t have to give in the future”. Maybe a fair match would be some percentage. A new project who has never offered rewards on xdai would require 100% match 1 to 1.

How much benefit should rewards in the last year have?
  • 75% of the past rewards can carry over. 1 for 4 match
  • 50% of the past rewards can carry over. 2 for 4 match
  • 25% of the past rewards can carry over. 3 for 4 match
  • 0% no amount of past rewards can be carried over. 1 for 1 match required for all projects.

0 voters

An example of 75% past reward matching would mean if 1hive requested $500k and over the last year honeyswap has given over $1.5M in rewards even though they far exceed the 75% cap they would still have to match 25% of the request (ie $125k). 1hive may also be interested in using the rewards to incentivize gardens or other 1hive protocols not just their swaper and that would be outlined in their proposal independent from this proposal.

How long should incentive reward period distribute per request:
  • Short concentrated distributions (2 - 4 Months)
  • Medium length (6 - 9 months)
  • 1 year
  • Longer
  • Allow projects to negotiate and be flexible

0 voters

Which protocols should we incentivize (select all that apply)?
  • All
  • None
  • dexes (honeyswap, curve, sushi, symm, etc)
  • defi (agave, hedgey, unicrypt, makerDAO etc)
  • nft (nifty, cold, xdaipunks, poap, etc)
  • DAOs (gardens, daohaus, dxdao, TEC, etc)
  • nft games (gustakes, darkforest, etc)
  • attract new product developement
  • Infrastructure/Integrations (tornado cash, giveth, xpollinate, elk, hop, etc)

0 voters

How much should $stake set aside for the entire incentive program?
  • Less
  • $10-$50M
  • More

0 voters

How many protocols / platforms should be incentives?
  • less than 5 to concentrate liquidity (focused on the big few and/or just 1 sector)
  • sample with a few protocols (such as defi, nfts, and daos)
  • As many as possible to do a broad reach of a variety of protocols and approaches

0 voters

Example 1 of a Potential Matching Incentive Structure

Agave is currently providing 500AGVE over 6months or $200k-$300k in rewards. If Agave were to ask for $500k in reward incentives (it would still need to match a min $200k-$300k in rewards assuming up to 75% of rewards can be carried over) as an A tier product a possible outcome would be the following:

Math prework: (stake mcap restriction in parenthesis assuming a $75M mcap stake)

  • $500k/12mo = $44k/mo (50%x44=$22k/mo)
  • Frontloaded rewards for 4mo at 50% = $62.5k/mo (50%x62.5k=$31.25k) for 4 months then $31.25k/mo (50%x31.25k=$15.625k)

Payout by month assuming stake mcap initially = $75M

  • In month 1 no tvl kpi restriction payout would be
    • 100%(tvl kpi) x 50%(mcap kpi) x $62.5k = $31.25k in rewards to bootstrap Agave.
  • If by month 2 Agave reaches a tvl of $30M payout would be
    • 25%(tvl kpi) x 50%(mcap kpi) x $62.5k= $7.8k
  • If by month 3 Agave reaches a tvl of $55M and stake is $105M mcap payout would be
    • 50%(tvl kpi) x 75%(mcap kpi) x $62.5k= $23.43k
  • Month 4 Agave reaches tvl stays the same but stake mcap drops to $80M payout would be
    • 50%(tvl kpi) x 50%(mcap kpi) x $62.5k= $15.625k
  • Month 5 Agave tvl stays the same stake mcap back above $100M payout would be
    • 50%(tvl kpi) x 75%(mcap kpi) x $31.25k= $11.7k

Example 2

Honeyswap has over the past year provided well over $500k in liquidity rewards. If $HNY were to ask for $500k in reward incentives (assuming 75% max cap it would still need to match a min $125k in rewards) as an A tier product a possible outcome would be the following:

Math prework: (stake mcap restriction in parenthesis assuming a $75M mcap stake)

  • $500k/12mo = $44k/mo (50%x44=$22k/mo)
  • Frontloaded rewards for 4mo at 50% = $62.5k/mo (50%x125k=$31.25k) for 4 months then $31.25k/mo (50%x62.5k=$15.625k)

Payout by month assuming stake mcap initially = $75M

  • In month 1 no tvl kpi restriction payout would be
    • 100%(tvl kpi) x 50%(mcap kpi) x $125k = $31.25k in rewards to bootstrap Honeyswap.
    • $HNY must match a min of $7.8k
  • If by month 2 Honeyswap reaches a tvl of $30M payout would be
    • 25%(tvl kpi) x 50%(mcap kpi) x $62.5k= $7.8k
    • $HNY must match a min of $1.95k
  • If by month 3 Honeyswap reaches a tvl of $55M and stake is $105M mcap payout would be
    • 50%(tvl kpi) x 75%(mcap kpi) x $62.5k= $23.4k
    • $HNY must match a min of $5.85k
  • Month 4 Honeyswap reaches tvl stays the same but stake mcap drops to $80M payout would be
    • 50%(tvl kpi) x 50%(mcap kpi) x $62.5k= $15.625k
    • $HNY must match a min of $3.9k
  • Month 5 Honeyswap tvl stays the same stake mcap back above $100M payout would be
    • 50%(tvl kpi) x 75%(mcap kpi) x $31.25k= $11.7k
    • $HNY must match a min of $2.9k
Is this presented KPI model for rewards reasonable?
  • Yes let’s try something like this
  • No something completely different

0 voters

5 Likes

Very well written and thought out proposal. I think this is a great idea.

1 Like