PROP #2: Determine Revenue Allocations

[aperire]

PROP #2: Determine Revenue Allocations

Date: Apr.20th 2023

Author: Joohwan Lee

Status: Proposed

Summary

As LP Finance moves out of beta phase, revenue would be now managed by the DAO.

Following is the proposed revenue allocation:

• LPFi Staking: 60%
• LP Finance Treasury (Realms): 20%
• SBR Purchase: 20%

Motivation

Originially, 100% of revenue was to be distributed to LPFi staking. This would enhance the price action of LPFi, but in an event where revenue decreases (bear market), the DAO would not be able to operate sustainably.

20% allocated to LP Finance Treasury would be solely controlled by xLPFi DAO and 20% allocated to SBR purchase would be used to purchase SBR and lock for 5 years for vote escrowed gauge voting.

As SBR gauge returns are at all time high, this investment would drive more TVL to zSOL-SOL LP, resulting in increased revenue.

Actions

Revenue allocated as follows (monthly)

• LPFi Staking: 60%
• LP Finance Treasury (Realms): 20%
• SBR Purchase: 20%

[TomintheToon]

Can you explain the mechanics of the SBR investment please? I'm not familiar with what you refer to as 'gauge returns'. How exactly will this investment drive more TVL to zSOL-SOL LP? Thanks.

[aperire]

Saber has a veSBR model, which immitates how Curve Finance works. We can lock SBR as veSBR and start voting for our SOL-zSOL pool to allocate SBR emissions to the liquidity providers. This would help boost our pool with rewards.

[TomintheToon]

Got it, thanks. I'm in favour of this proposal, thanks for sharing and the opportunity to comment.

[TomintheToon]

Summary and Actions % allocations are different?!

I think perhaps all revenue should go to the LPfi DAO and then the DAO can vote on how to allocate funds from the DAO? Does this proposal open up the possibility of manipulation by not sending all funds to the DAO first?

[aperire]

Summary and Actions % allocations are different?!

I think perhaps all revenue should go to the LPfi DAO and then the DAO can vote on how to allocate funds from the DAO? Does this proposal open up the possibility of manipulation by not sending all funds to the DAO first?

Fixed it. I believe we are at an early stage, therefore can try multiple options. I believe directing 100% of revenue to LPFi staking first should be the right move. LPFi staking had no rewards for months and accessing governance has a high wall for most users.

[TomintheToon]

OK, so you are proposing to stay with 60/20/20 or move to 100% to LPfi staking?

[aperire]

Posting on github might be confusing, so we will continue discussion on reply section and finalize the decision. On Realms, will specify the proposal.

I am proposing to move to 100% to LPFi staking.

[TomintheToon]

I think that is better too.