GP12 DeFi Rewards (TDR) Proposal - Algomint

G’day Algorand gov’s, Algomint is seeking feedback on our GP12 Rewards Proposal. Feel free to drop your comments and suggestions. Due to feedback from participants Algomint have removed goMINT reward allocations.

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I do not support allocating TDR towards incentivizing goUSD. At this point, I recommend sunsetting the goUSD product and focusing all resources on goBTC and goETH.

I do not support allocating TDR towards goMINT because it has no utility.

Keep it simple:

Pact Lending Pools
ALGO/goBTC 10%
ALGO/goETH 10%
goBTC/WBTC 10%
goETH/WETH 10%
goBTC/GOLD 10%

TinyMan Lending Pools
ALGO/goBTC 10%
ALGO/goETH 10%
goBTC/WBTC 10%
goETH/WETH 10%
goBTC/GOLD 10%

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How will gousd be used on algorai?

I kind of agree with oyster might be time to sunset gousd and focus on gobtc/goeth.

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What happened to x-NFT and the funds that were allocated for it in Gov 10? This really needs to be accounted for, IMO.

Agree with @oysterpack and @APT that goUSD really isn’t serving anyone and should be sunset.

goMint has also never fulfilled any of its original intended purposes as a governance token since it’s been released. Either release plans and show evidence that the token has any merit worth supporting or remove it from this proposal.

I also haven’t seen any marketing or metrics for goBTC or goETH in a long time. I don’t see how they’re useful anymore considering non-custodial wrapped BTC and ETH are easily available via Wormhole which connects Algorand to the larger crypto ecosystem. I’d love to see some reason to support this proposal but so far I’m likely to vote no as a whole.

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Tbh I’m not sure if we need two native Algorand Stablecoins… currently the basket weights seems to be controlled by AlgoMint whereas xBacked Vaults allow the users to diversify the backing of xUSD which is over-collateralized. What steps is AlgoMint taking to ensure that goUSD will remain backed by a diversified basket and not almost 93% backed by xUSD?

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Hi Oyster,
We have been waiting on governance contracts that will be open source (coming out soon) to implement utility for goMINT. We took the decision to wait for open source code primarily to conserve runway/development funds.
With regard to supporting goMINT with rewards, there is a very small allocation (less than 2% to retaining the goMINT liquidity) so it is a minimal retention amount.
To address the comment, goUSD has been highly effective with significant volumes across pools so we aren’t keen to give up on it with the first bump, however if we don’t see a change in the coming period we will certainly look at sunsetting if there is no demand obviously we would retain the ability to reinstate if the opportunity arose.

Hey mate,

Algorai have started to allow goUSD to be used as an alternative USD deposit asset (only on the GOLD pool but hoping to expand this to others). Also see the reply to Oyster on goUSD (prior to the last month it was highly effective and saw significant volume as a conduit between the different USD assets).

Hey mate,

There is some exciting news around X-NFT coming, the previous period release is complete and awaiting this news for it’s release. Algomint has also covered this periods X-NFT program as well out of its own treasury with news on this coming as well (It has taken a bit longer than anticipated to get to the announcement stage :weary:) so stay tuned!

As mentioned to Oyster (please see that response) we held off on goMINT governance awaiting open source contracts. Originally this was going to be available much sooner (from a different team) had we realised it was going to be almost 2 years we probably would have done this differently.
goBTC is still the only BTC native wrapped option on Algorand, Wormhole (who we are a big fan of) is double wrapped, wBTC that is then again wrapped (the first wrap being custodial BTC > wBTC). There is also more than 3x the circulating supply of goBTC and almost 3x the circulating supply of goETH. It also has a range of additional utility that isn’t available for wBTC / wETH.
But a key element is not wanting to double wrap BTC.

1 Like

Hi Mochanerd,
goUSD is a bit different to xUSD and our current proposal focuses on USDC and USDT with goUSD, and no incentives for xUSD / goUSD. This is designed specifically to help drive what you have described.
The key issue with goUSD is that it has been used as the conduit to other USD assets. Algomint can control what is done 1:1 (basket settings), but once it passes, users can still trade the capped asset but at a rate different to 1:1 - essentially adding more of 1 asset to receive goUSD. The idea being that goUSD then has more than 1:1 backing as a penalty for unweighting the baskets. xUSD holders have ended up doing this to the extent we see now. The xUSD will be needed by vault holders to repay loans at some point so it will be reversed but there just isn’t enough demand to hold / use xUSD or liquidity in the other USD assets in the basket to support this properly. I think the question is less can they live together and more so can goUSD afford to include xUSD in the basket - this was initially intended to help xUSD find utility which is it did but we agree that more work needs to be done.

1 Like

I think otherwise looks good, but maybe take bit off from goBTC/wBTC & goETH/wETH and allocate some into Tinyman goUSD/USDC.

Side note: Do not sunset goUSD like said in here, I suggest that you should rather expand introduce goEUR.

Best regards,
ROAM

1 Like

I am not sure I agree with the even splits. More nuance may be needed as to both asset pairs and DEXes. (Personally I wish they would throw Humble a bone since they got rekt by not getting any TDR last time and so they had crap volume for calculating rewards this time around. But, I’m not as concerned about DEX splits as I am what pairs get rewarded).

I definitely agree goMint should not receive incentives. It is not bringing in new liquidity. It does not spur usage of the app. All it really does is reward goMint whales. Normally these sorts of project tokens would be used as emissions to reward people for using a protocol. So it’s a nonstarter for me to have TDR rewards used to support that.

I also think goUSD should be subset (it is struggling to find a purpose beyond just rewards farming). But, given that they don’t seem to want to do that, they should not be allocating those rewards to pairs like Silver and Gold. Neither of those pairings help it hold peg. And given that this “stablecoin” can’t hold peg, it feels wildly irresponsible to be incentivizing these pools.

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I cannot endorse TDR allocation for goMint and goUSD. If such allocation is proposed, I will vote against it.

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@oysterpack @GhostOfMcAfee

We have listened to your feedback and removed goMINT rewards from our TDR plan. Those rewards have now been split 50/50 to the goBTC<>wBTC and goETH<>wETH pools on pact.

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Thank you. I’m glad you all are seriously considering community input.

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@oysterpack @ROAM @mochanerd @bitshiftmod @APT

Hey folks,

We wanted to share our thoughts around goUSD, emphasising the important role it has played over the past year and why we believe it deserves continued support and further refinement.

Prior to Algomint’s baskets, there were limited options for stable swaps on Algorand. The commencement of our USD baskets, including goUSD, was responsible for the vast majority of stable swaps. In fact, USDC<>goUSD achieved a TVL of over $900k in May 2023 with a daily volume of between $15k and $115k ( here ). When looking at goUSD<>USDT, we were the first to supply this stable swap in June 2023, with a TVL over $110k and daily volumes up to $50k ( here ).

The data clearly shows that goUSD baskets were the key driver for USD stable swaps on Algorand. This was true until the inclusion of xUSD, which was intended to support a native decentralised stable token. We provided xUSD with a home and utility, which was successful until demand to move from xUSD to other USD tokens to take advantage of TDR rewards became too great. This was compounded by TDR rewards not being awarded to xBacked or Algomint, driving yields from xUSD options to USDC and USDT options.

In light of this, we view goUSD as a success and don’t believe it should be retired due to the recent depegging of its price. It’s important to note that goUSD is backed by more than 1 USD token per goUSD, indicating that the depeg was always going to be temporary. We remain keen to support xUSD, as we believe that an over-collateralised USD token in Algorand is an important asset that needs to succeed.

We understand that some community members were sceptical of adding xUSD to the basket, and we chose to support this native asset. The new TDR plan helps to correct the imbalance there currently is in the baskets, with a cautious approach with minimal support for xUSD stable pairs and a focus on USDC and USDT aiming to return the basket to its previous standing and utility. Whether Algomint’s support of xUSD should continue is a question for the community. If there is a resounding ‘no,’ then we can implement a process of removing it.

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I think there needs to be some sort of smart contract mechanism in place that prevents any one token from becoming over-weighted in the basket, not having any checks/balances allowed xUSD to become the majority backing regardless of incentives or not. It’s the mechanics behind keeping the basket diversified is more what I care about, not sunsetting goUSD.

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I interpret what you’ve written as goUSD only created TVL and volume when there was TDR rewards and that once removed it did not stand on its own. I think we should expect bumps in TVL and trading fees for any incentivized pool (regardless of blockchain), and that we should be looking at fundamentals in evaluating the product.

Considering goUSD basket risk was not managed well with its overexposure to xUSD and resulting depeg, and failure to succeed without incentives, and surprising lack of documentation and product description online (there is little of goUSD in the documentation on Algomint’s website nor any product page for goUSD), I have yet to see anything to change my mind to support goUSD.