GP13 DeFi Rewards (TDR) Proposal - CompX

Governance Rewards Proposals
,
1

We are revamping our previous submission for GP13 to focus more on three specific metrics for Algorand. TVL, Transactions and new users.

Total rewards allocated: 118,581 ALGO

Pool/farm/Staking TDR % Platform Reward Amount Metric Focus
xUSD staking 20% CompX 23,716 A New users
xUSD / USDC 10% CompX 11,858 A Transactions
xUSD / GOLD 5% CompX 5,929 A Transactions
xUSD / Silver 5% CompX 5,929 A Transactions
xUSD / ALGO 10% Tinyman 11,858 A TVL
xUSD / EURs 5% CompX 5,929 A Transactions
Token Wars 2 5% CompX/Pact.fi/Messina 5,929 New users
xUSD Vault Incentives 40% CompX 47,432 A TVL

All proposed pools/farms/programs affect TVL - we have only called that out specifically for 2 options as explained below

xUSD Staking
We want to increase our reward amount toward xUSD staking for GP13 as we want to offer a compelling and simple way to earn yield from one of our core assets. This is in addition to assisting with the soft $1 peg for xUSD.

Token Wars 2
We felt that token wars was a successful program ran by Messina with ours and other partnerships. We feel that we could do even more in terms of collaboration with non-algorand projects in this second round and further increase new users and new TVL coming into the ecosystem.

xUSD farms - USDC, Gold, Silver and EURs
We have paired down our pools from our previous GP13 proposal as we want to focus only on core pools for xUSD. The USDC farm saw great inflows of volume in GP12 so we wish to keep that in the plan. GOLD and Silver continue to be large parts of the xUSD liquidity if in a reduced capacity this quarter. We want to continue to incentivise these farms but at a lower level tied to the lower TVL they now bring in.
We’ve classed these farms as focussing on the Transactions metric as our auto-compounding farms generate a large number of transactions per day per user.

xUSD/Algo
This farm is located on Tinyman and while it will generate transactions, they won’t be as much as our auto-compounding farms so we’re classing this under straight TVL. Algo pairs are very important for all ASAs and xUSD is no different. We will want to always incentivise this pool/farm through TDR or another mechanism in the future.

xUSD Vault incentives
One of the main points of change between our original GP13 proposal is that we want to have a much bigger focus on xUSD vaults and the minting of xUSD. xUSD vaults are one of our key drivers of TVL and revenue and so we feel that for sustainability for CompX and for the ecosystem, we should heavily incentivise the creation and maintenance of vaults.

While bringing users to mint xUSD via incentives is one thing - CompX is dedicated to showing users why they should retain their vaults after TDR and into the future. A separate marketing campaign and additional use cases for xUSD are in the pipeline to accompany these vault incentives if approved. (No TDR funds will be sued for these marketing/use cases mentioned)

In terms of mechanics Vault incentives will come in three forms:

  1. 50% of rewards to all vault owners with healthy vaults - paid out weekly and scaled based on their share of the total xUSD minted.
  2. 25% of rewards to vault owners of healthy vaults in featured vaults - paid out weekly and scaled based on share of total xUSD minted in featured vaults. Featured vaults will change weekly.
  3. 25% of rewards to monthly lottery - all new vaults opened during the GP13 period will be entered into a lottery once per month. Entries will be based on total xUSD minted by an address during the GP13 period. Snapshots will be from the 1st of the month to the end of the month - with rewards paid out the following week to the winner of each lottery.

Healthy vaults are those above the liquidity threshold for the specific collateral value. Vaults must be kept above this to qualify for any rewards.
Note: Vault incentives are calculated on minted xUSD per vault - users are free to use the xUSD in their wallet how they wish and holding xUSD is not required to qualify for rewards.

A long read but I hope the detail is appreciated. Please let us know your thoughts.

Edit: Updated reward numbers

3 Likes
2

Copy Pasta:

We’ve become flexible with cross-chain assets over the years but it’s starting to feel like overkill.

I’ll also add that I have little confidence that these pools are being utilized by enough unique wallets and/or with a decent enough spread. Essentially enriching a number of wallets that aren’t meaningful—simply for giving us the time of day.

At the very least, the list of pools should be condensed and the amount requested should be more frugal with respect to the recent transparency report. But, TDR feedback has been mostly white noise with little action in the past from respective platforms.

I’d also like to know if these platforms are able to vote for themselves in any capacity through governance, and if this is being enforced in anyway.

It’s not unlikely they have a heavy voting weight with disregard for community sentiment in some aspects, as we’ve witnessed with one of the largest grant receivers in xGov Periods 1 to 4.

A separate argument perhaps, but I feel any holdings exceeding the average community member by 20 fold and affiliated with platforms that are consistently injected with funds should not be eligible for voting and carefully tracked. Otherwise Algorand becomes the platforms’ chain, and not the community’s chain. ~~~

1 Like
3

The LP with X-NFT seems extraordinarily unworthy of any allocation, much less 10% of CompX’s TDR. X-NFT and HoneFi were essentially defunct for a while. If it is trying to come back, great, but it needs to show some kind of life before throwing these rewards at it. It has $3.19 in 24hr volume. Why would we provide nearly 14k Algo in incentives for a token with almost zero usage?

In line with my thoughts on TDR generally, I also generally find incentives for pairings with things like Coop, Chips, etc to be not the best uses of funds (though I can see benefit from programs like token wars that try to bring in outside liquidity). But, I’m particularly against the high allocation for Tiny token especially given their proposal to use 12.5% of their own TDR for their own token in an Algo pairing.

2 Likes
4

Hey thanks for the comments.

The thoughts on x-nft are in some ways justified but x-nft has been relaunched on CompX last week, a new collection coming end of this month and more use cases for it as a whole.
We want to build a solid liquidity position for the token - providing incentives will help to do that.
However I do hear you on the amount so I think we’ll drop it down somewhat until it’s more proven as it were.

On the Tiny front - we want xUSD to be one of the main liquidity positions for the tiny token - tinyman are a massive part of the ALGO ecosystem so we want to support that while also boosting for xUSD.

We hadn’t collaborated with tinyman so hadn’t seen their own allocation previously - perhaps we will take a look at the specifics and revise ours.

Appreciated as always!

1 Like
5

Appreciate the response but there is zero reason to be incentivizing LP for a token with zero trading activity currently.

Also I find the decision to focus on a Tiny LP to be strange from a business perspective. It’s going to have massive inflationary pressure.

At any rate, I view all of this as nibbling around the edges of the larger problem which is the rudderless nature of TDR as a whole.

1 Like
6

Hey!

Great proposal, I’m a fan. I’d like seeing maybe 5% less for XNFT rewards, or honestly maybe even have it match COOP and CHIPs. Use the remainder as you see fit, but I think xUSD staking may be the best for this extra amount (or like 5% more for staking and 2.5% more for token wars, assuming XNFT was decreased to 2.5%)

Allocating to $tiny/xUSD is a bold move that I support as well. I hope Tinyman matches some of those rewards too. Stable liquidity could help their token, and no better to do it than Algorand’s own xUSD. There’s layers to this too… $TINY as vault collateral, $tiny vaults somehow integrated into Tinyman governance, etc.

Eurs is a great addition. Very happy to see CompX expand and add new collateral options. I can’t wait to see what Lofty token collateralization looks like too :beers:

1 Like
7

Love :heart: the new proposal maybe take 5% from the xUSD/USDC staking and add it to the xUSD staking .Just to really beef :cut_of_meat: up that product line . In all love the change something different this time around .vault incentives is a really good idea to and the lottery is a fun :star_struck: refreshing idea as well

8

We agree on a lot, but I see the stable pool as being absolutely mission critical to the proper functioning of xUSD. Stability hinges more on this pool than any other. xUSD staking in the current manner is only tangentially related to stability, even though overall it’s a worthwhile endevor. If anything I’d go the other direction, moving rewards from staking to the stable pool. That’s my 0.02 xUSD at least😃

9

Really appreciated you updating your proposal. Thank you.

2 Likes