BANK Emissions Distributions (January 31st - February 28th)

Proposal Discussion
1

Summary

Executed January 31st, 2023

Before the Rewards Manager is launched, the Algofi DAO will approve allocations of BANK emissions on a monthly basis. This proposal concerns emissions from January 31st - February 28th.

After the voting period for this proposal passes, a new proposal for allocating emissions will be launched for voting by the community, which will concern emissions from February 28th - March 31st.

Users are encouraged to voice their opinions on future emission allocations in the Temperature Check category of the governance forum to ensure they are taken into consideration for preparing emissions proposals. Ultimately, this process will be automated on chain with the Rewards Manager.

The motivation is to promote the growth of liquidity on the Algofi lending protocol and DEX.

Emission allocations can be found below.

Proposal

Emit to Lending markets, Lend and Earn contracts, Staking contracts, and the Algofi Vault in the proportions outlined below. As markets have grown more bearish, rewards are recommended to be concentrated in blue-chip assets like USDC and ALGO. The Algofi Vault allocation is unchanged ahead of the next governance period launching in early Q1. Allocations to the stablecoin Lend and Earn contracts and STBL2 USDC LP market are kept elevated to promote stablecoin liquidity.

Contract Current Allocation New Allocation Change
USDC L&E 26.75% 26.75% 0.00%
USDT L&E 2.00% 2.00% 0.00%
ALGO Borrow 0.50% 0.50% 0.00%
USDC Borrow 0.50% 0.50% 0.00%
goBTC Borrow 0.25% 0.25% 0.00%
goETH Borrow 0.25% 0.25% 0.00%
USDT Borrow 0.25% 0.25% 0.00%
STBL2 USDC Market Supply 32.50% 32.50% 0.00%
STBL2 ALGO Staking 8.00% 8.00% 0.00%
STBL2 goBTC Staking 2.00% 2.00% 0.00%
STBL2 goETH Staking 2.00% 2.00% 0.00%
USDC ALGO Staking 7.00% 7.00% 0.00%
ALGO Vault 10.00% 10.00% 0.00%
STBL2 BANK Staking 4.00% 4.00% 0.00%
ALGO BANK Staking 4.00% 4.00% 0.00%
2 Likes
2

A couple of points for considerations:

  • USDT usage is so low could we consider decreasing that allocation from 2% to 0%?
  • Conversely the supply of USDC is much greater that the USDC being borrowed so could we consider bumping the USDC Borrow allocation from 0.5% to 1%. In alignment with this suggestion, USDT borrow should be reduced to 0%
1 Like
3

i dont think borrowing USDC should be that heavily incentivized because it would hurt STBL2 the protocol issued stablecoin if the interest rate gets too low of USDC

4

In the chart above, I don’t see any BANK emissions distribution for borrowing STBL2. I wonder why ALGO Borrow, USDC Borrow, goBTC Borrow, goETH Borrow and USDT Borrow all have a small allocation and STBL2 doesn’t? I wonder if it has something to do with infinite supply of STBL2.

1 Like
5

BANK emissions for borrowing STBL2 would just incentivize rehypothecation

4 Likes
6

Makes sense.

It will be so interesting to see how the community allocates emissions when Rewards Manager launches. I for one will come back to charts like this one to see how differently (or the same) BANK holders vote on emission distributions.

7

I agree, I’d suggest lowering USDT to 1% and bumping ALGO and USDC borrow to 1%

2 Likes
8

giving ALGO borrow a bump because of the relatively high borrow APR might be a good idea agree

5 Likes
9

Looks like this proposal was promoted to “active” in governance with no changes based on the discussion. As a result, I’ll be voting “no.” I realize that Rewards Manager will make it much easier to tweak and for governance to feel more active and transparent. As a result, the “no” vote here is about principles and not negative.

Hopeful that the March/April distributions will be decided via the new Rewards Manager process. :deciduous_tree:

1 Like