GP12 DeFi Rewards (TDR) Proposal - Pact Fi

Values updated as of May 21st

Greetings Algorand Family,

GP12 is up and coming, and we have taken alot of time in considering how we would distribute these rewards.

For this quarter, we are approximating 1,128,000 ALGO in rewards. We have attempted to consolidate down on pairs, placing higher weights with key LPs, and putting a larger focus on lending pools. Let us know what you think!

You can read more on our medium post: Pact TDR G12 — Updated Allocations | by Pact.fi | May, 2024 | Medium

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goUSD has shown its not ready to be used since algomint isnt able to balance risks and keep goUSD pegged. they make shortsighted decisions and their basket limits are no limits at all. thats why you shouldnt focus on goUSD at all and instead USDC-USDt pools for example. at this point goUSD=xUSD and xUSD itself has problems as well

why use a lot of tokens on xUSD? again look at its peg and how bad it has been. people coming into the ecosystem would want to see established and stable stablecoins imo and you focusing on xUSD is a bad decision. why should you use the same amounts for xUSD-METAL and USDC-METAL pools? that doesnt make sense. if you want to support xUSD then focus on a xUSD-USDC pool and smaller other allocations imo

nobody cares about the goETH-wETH and goBTC-wBTC pools except the VCs that farm it imo, there are very few very big wallets using the farm to earn free money. this liquidity doesnt help the ecosystem at all and you should use these funds for something else

stop benefitting your friends and think about whats the best for pact and the ecosystem to attract new users

4 Likes

Hey lobo :slight_smile:

To shine some light on our decisions around goUSD and xUSD in particular…

I agree with you the xUSD and goUSD have struggled to find peg as of recent, though I have had conversations with both teams about their strategies to bring these up and am supportive of them, as they have been long time ecosystem players and partners and I believe can provide value. Overall contributions to xUSD & goUSD is 97.5k, and majority of it is on tying them to our main stables (USDC & USDt). This is in part, to help drive LP and buy pressure on these tokens to help them reach a more stable peg. This allocation is much smaller than those of the past.

The metals are a fair point, perhaps focusing more greatly on xusd-usdc as mentioned could be wiser. However, I do want to note that there is sizeable liquid for these pairs that we dont want to lose, and the incentives vs TVL is small compared to most of our other farms suggested. xUSD - metals hold $770k in liquid and we are suggesting ~ $7k in rewards, and the metals also are connected to sizeable algo & usdc pools, helping further to help support peg. There is still needed action from the teams to get it back in an appropriate range, but I do think they will get there.

Yes, USDC-USDT is far more important liquidity, which is why we have went from 140kA last quarter to 210kA this quarter, and that is with less rewards, so % wise even a greater increase.

as far as the BTC/ETH comment, the TVL here is over 3M+ … is it largely VC money? sure. Is most of Algorand liquid VC money, also yes (though we are hell bent on sending it away). A total of 50kA ~$9.5K is used to incentivize this. VC or not, there is still importance of having these pairs and the APRs equate to like 1%, which helps to at least keep this liquid in Algo DeFi. Would I say its the most important pair? of course not, but I think its well worth it for the amount of TVL & options it brings to the eco.

With all this being said, we value the feedback and this is not our final allocation set. We will be making adjustments by time the review period closes.

Why allocate 40k to malgo-algo pairing. Are they turning malgo into a liquid staking token?

Since xusd=gousd at this point i think it makes sense to remove the gousd-usdc/usdt pairs and just go with xusd instead. Or the opposite (make the metal pairs gousd vs. Xusd) it really doesnt matter. Splitting between the two probably hurts the peg more

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Hey man,

mAlgo is intending to move it to an LST, though they are still waiting for more technical details to best determine their lift and how they will pivot it. So I think its valid to keep on this quarter. I spoke with you a bit about my worry around gAlgo in this regard, which is why we reduced our allocation. We still want to capture this liquidity so we didnt completely abandon, but we are excited to see what Folks puts out and will continue to partner with them on their new product(s).

xUSD and goUSD are seperate companies, but I get what you’re putting down. Let me put that into consideration.

Hello, can you incentivize also Vote Coin pools, ASA.Gold pools and GoldDAO pools please?

I think we need at least one native Algorand Stablecoin. xBacked is backed by over-collateralized CDP vaults of various Crypto assets. goUSD is backed 93% by xUSD. If anything that proves that xUSD has the stronger backing and goUSD should be sunset. Imo it’s not fair to lump them in the same category.

What is your reasoning behind this?

I think AsaStats should have a higher allocation, we ALL use the portfolio tracker and they already announced that premium subscriptions should begin by the end of June. They’ve proven to be an invaluable protocol when it comes to tracking token holdings, staking and LP positions across multiple wallets. Nothing else comes close!!!

2 Likes

I can get behind this, I will revaluate. Ipaleka has been an OG in the space and I do love ASAstats.

As far as the xUSD over goUSD, its a consideration. I think Algomint is a great team who brings value though it hasn’t been fully realized/panned out. I don’t think them leaving is the preferred option for me (though I guess you said goUSD in specific).

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I’m not asking for AlgoMint to leave the ecosystem entirely, I just think the goUSD token should be deprecated if there’s not a solid plan to keep the basket diversified…right now it’s almost entirely being propped up by xUSD, this is facts

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  • VoteCoin is the top 10 token according to vestige by TVL and most TVL is locked in pact, is one of the oldest tokens in algo ecosystem, project incentivizes the pact pools with 50% APY farming rewards long term to support low lp fee pools to help algorand DeFi
  • ASA.Gold and GoldDAO tokens are the first tokens with MiCA compliant whitepapers, and pact fi seems to incentivize gold tokens backed by real world asset reserves, so I assume they should support also the asa.gold project
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I agree 100% that ASASTATS needs more love. One of the best projects on algorand to this day

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TDR’s primary goal is to grow the overall Algorand DeFi ecosystem. With this in mind, I propose the following changes:

  1. Reallocate mALGO TDR because Messina refuses to disclose their future plans for mALGO with governance rewards being phased out.
  2. Reallocate gALGO TDR because gALGO is planned to be sunsetted. There’s no long term benefit there and the liquidity is temporary.
  3. Reallocate goUSD TDR because there’s no point in allocating funds towards a failed product.
  4. Concentrate all xUSD TDR into the USDC/xUSD pool

The reallocated funds should be used to boost the lending pools for ALGO/USDC and Wormhole assets:
fALGO/fUSDC
fALGO/fWBTC
fALGO/fWETH
fALGO/fWSOL
fALGO/fWAVAX
fALGO/fWLINK

Hey Oyster,

Thanks for the input.

To address some points:

1.) I speak with Messina a bit, and while I know they are still finalizing their models - the plan is for mALGO to continue so we see value in the relationship.
2.) I agree with this. We wanted to leave some galgo/algo on the table to still bring people to LP and be able to swap during this (likely) last quarter. We will review this and guide down.
3.) I have been mauling this over deeply. I’m not sure if this fully the case thats it failed, but I understand its not in a great position. Will review and likely guide down though I dont think we will totally rid this.
4.) While xUSD/USDC is beneficial (and we plan to push more into this from other allocations) we still will move forward with the Metals pairing. Pact has over 4M ALGO in TVL and for the allocation set, is quite small. We want to keep this TVL and think it helps xUSD to have this deeper liquid as these metals are also paired with things like algo and usd. I am a huge believe in RWAs and think the metals provide sufficient (dare I say better than usd) stability. In a perfect world if that liquidity migrated from the metals to USDC, id see more of your side, but that would not be nearly the case.

reallocated funds make sense, we have a rebalance coming soon. Giving it a couple more days for added feedback and then will post!

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We have updated our allocations above!

Hi,

Please allocate funds into goUSD. it is not failed at all. people use its basket all the time. I think if goUSD pools against USDC or USDT are incentivized even more, it will help goUSD with peg, but also to gain larger TVL and will make it more used in the ecosystem.

Best regards,
ROAM

Hey ROAM,

We have still kept allocations to gousd/usdc+usdt , though decreased them 25%. As things progress and goUSD sees a better balancing/stability Id love to continue to help them grow and revisit allocations.

We actually will have one more updated TDR posted shortly, due to some recent updates just FYI

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Love the increase to ASASTATS this perioid!