Messina TDR Distribution Plan Suggestion For GP11

Targeted DeFi Rewards (TDR) are undergoing a significant change for GP11 and the governance team have asked us to seek feedback from the community about our distribution plans before putting them into the governance voting in March 2024 for governor’s approval.

In GP11, Messina proposes to distribute our TDR as follows:

Partnerships with DEXes (Tinyman, Pact, etc) and AlgoRai to incentivise LP Pools for tokens that Messina bridges into Algorand (wBNB, Pepe, etc) and mALGO : 100%

Unfortunately we are not able to share the exact quantity of ALGOs at this time as this calculation has not been completed by the governance team yet. Also the breakdown of which pools will receive rewards is not firm yet as discussions with DEXes are still ongoing, and our policy is we work with protocols that are willing to match our contribution of rewards to their protocol at least 1:1. We hope that by the time we go to governance voting we will be able to firm up these details.

In previous TDR periods we had distributed a small portion of the rewards to the mALGO pool and that was not well received by the community. Though mALGO numbers account for more than 33% of the metrics that earn our TDR allocation, we recognise this concern and will instead allocate rewards to pools that utilise mALGO so it drives more use case and incentivises deployment of the token.

We look forward to your feedback, thank you!

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Can you give an approximate idea of how the distribution across the different assets in LP? Every other project seems to be able to do this, but just saying 100% will got to wBNB, pepe and “etc” rings very odd to me. You’re probably going to get close to 200000 ALGO, I think you should be able to do a better job motivating where those will end up than what you did here.

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this is not a plan at all, you are essentially saying “trust us we will distribute them in a way that we think is right”. but these times are now hopefully gone so give us a more precise plan

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Echoing other’s sentiment. Even if the figures are not final, you should have a percentage based distribution that can be commented on. As for the policy, if that’s a stand you’re taking, which is fair enough, then at least there should be a comment as to what pools and what protocols have agreed to it. Lastly, just using etc. for partnerships is very hand wavy. I hope we see some clarifications on the raised points.

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I concur, this proposal has too little information to evaluate. It’s disappointing to read and makes me lose confidence that Messina will allocate funds in a way that respects the purpose of the TDR. I expected much, much more and find this disrespectful to the community. I hope if the TDR continues that this kind of presentation of plans is penalized.

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Thank you all for your feedback. We agree that this level of detail is insufficient and too broad, and we will share in detail the exact protocols and pools that will receive our TDR allocation in ALGOs (like we have in previous quarters) before the deadline for submission to the governance committee (26 Feb) for it to be included in the governance vote in March 2024.

Just to share why our first post was so general, we were given a deadline of 16 February by the governance team and DeFi committee to post our plans in this forum to get community feedback or be excluded from receiving TDR altogether, with just 7 days notice and one month earlier in the quarter than in the last year. Because Messina is a bridge and liquid staking, we don’t allocate TDR to our own pools like other protocols. Instead we partner with other protocols like DEXes and DOVs to incentivise pools that utilise tokens that Messina supports. This requires us to talk to all our partners and discuss which pools and how much, and if they will support those pools as well. Unfortunately these discussions could not be concluded by 16 February and are still ongoing, so we had to just create this thread first with a general description to maintain our eligibility, and as soon as they are finalised we will share those details here for the community’s feedback.

Additionally the DeFi committee has completely overhauled how TDR is calculated and allocated this quarter which has led to extra time taken to complete our submissions. To date the amount of ALGOs we will receive has not been finalised, just a preliminary number has been shared and we do not want to state numbers to pools that we are not confident of yet.

We can share that the preliminary numbers indicate Messina will receive about half of the allocation we received in the previous quarter, despite our TVL increasing significantly. This is because the metrics for TDR calculation has been overhauled as mentioned previously. We hope to work with the committee to increase our allocation in future quarters to grow the usage of Messina and reward users of the tokens we support.

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Hi,

This sounds odd to me:

So if they will not match AT LEAST 1:1, then you will not use any funds? no good boys…

Why you can’t just leave ego aside and provide solid plan.

You can use this one if you want (I think better than nothing):
ALGO/mALGO 20%
ALGO/goBTC 10%
mALGO/goBTC 10%
ALGO/goETH 10%
mALGO/goETH 10%
ALGO/wBNB 10%
mALGO/wBNB 10%
ALGO/PEPE 5%
mALGO/PEPE 5%
ALGO/DBD 5%
mALGO/DBD 5%

Regards,
ROAM

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Overall too little details. I appreciate that more are to come, but until then this seems a big red flag. Especially the following statement:

the contribution comes from Algo emissions, it’s not your own and doesn’t seem like your call to enforce other platforms to play by this rule. Instead you could discuss to increment % on DEXs contributing to that, but generally this to me doesn’t sound right.
The important goal is for those funds to be driven into pools or other protocols to drive liquidity activation. (f.e. sitting in LSTs is not active liquidity, Defillama doesn’t count liquid staking for any protocol doing so)

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Imo basing any decisions off of DeFi Llama metrics will get us nowhere. In addition to not counting LSTs, they don’t count tokenized RWAs into DeFi TVL either. Who made them the Defacto Judge of what is and what isn’t counted in DeFi?! I’d personally recommend against DeFi Llama having any factor in decision-making for Algorand DeFi! Chaintrail imo is doing a WAY better job representing network metrics.

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The point isn’t that we should use defillama as a guide to drive decisions. But there’s a reason why LSTs shouldn’t receive ulterior incentives on top of what they are already getting from their own mechanism.
Rewarding LSTs doesn’t improve DeFi because it’s just rewarding passive farming for someone else to stake instead of you. There’s no activation of the locked liquidity into something productive. F.E. Liquidity providers in AMM are providing liquidity to improve the trading activity, or lending pools are allowing higher borrows. But liquid staking is just locking liquidity for someone else to keep it locked. If you want to incentivize staking then you’d just use those rewards directly into governance (consensus in the future).
Can you give me a reason why instead of rewarding active and useful liquidity we should direct the rewards to just sit on top of the already rewarded governance staking?

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I actually think Governance rewards should be phased out entirely for Node-running incentives…that would change the dynamics of LSTs so yeah it wouldn’t make sense to double-reward

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Unfortunately we are not able to share the exact quantity of ALGOs at this time as this calculation has not been completed by the governance team yet. Also the breakdown of which pools will receive rewards is not firm yet as discussions with DEXes are still ongoing, and our policy is we work with protocols that are willing to match our contribution of rewards to their protocol at least 1:1. We hope that by the time we go to governance voting we will be able to firm up these details.

Not sure if my two cents will help but… since you do not have the exact quantity of ALGOs yet, maybe you can provide a % breakdown? So instead of saying, X ALGOs going into pool Y, break it down to something like this (random LPs and % distributions for the sake of an example):

  • 25% of ALGOs into Tinyman mALGO:ALGO LP
  • 25% of ALGOs into Tinyman wBNB:ALGO LP

Also, I know you guys got poor reception for mALGO pool… but I’d like to still have some reward allocation there.

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In the latest TDR allocation draft calculation by the Foundation, Messina has been awarded 447,718 ALGO to distribute. We have been in discussions with partner protocols and our proposed distribution is as follows:

Tinyman

  • mALGO / ALGO pool: 120,000
  • wBNB / ALGO pool: 13,500
  • PEPE / ALGO pool: 13,500
  • BIGBOI / ALGO pool: 10,000
  • Future assets planned with Tinyman: 27,000

Pact

  • mALGO / ALGO pool: 120,000
  • mALGO / xUSD pool: 5,000
  • BIGBOI / ALGO pool: 10,000

AlgoRai Finance

  • goBTC Bear: 10,000
  • goBTC Bull: 10,000
  • goETH Bear: 10,000
  • goETH Bull: 10,000
  • mALGO Bear: 78,718
  • PEPE Bear: 10,000

Your distribution of rewards is exactly why we should abolish TDR. The more I read this stuff the more I take your platform as a joke.

There is no way you and whoever you talked to thought this was a good idea of rewards allocation.

Future assets with tinyman? Saving for $Tiny drop? :laughing:

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why are you at all rewarding stuff on algorai that has nothing to do with mALGO or any of your assets (just because you wrap ETH into goETH its still an algomint asset)? i know that algo foundry is behind messina and algorai but that doesnt mean you can just do stuff like that, keep those projects separate! You as messina should focus on the stuff that makes people use messina more and not random stuff on algorai. you could just incentivize mALGO-USDC pools instead

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What is this??? Joke I hope… like WTF ?

What is that BIGBOI thing? Also pretty heavy AlgoRai incentives… not good at all.

this is embarrassing.

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Looking at the revised proposal and the original propoal’s intentions:

“Partnerships with DEXes (Tinyman, Pact, etc) and AlgoRai to incentivise LP Pools for tokens that Messina bridges into Algorand (wBNB, Pepe, etc) and mALGO : 100%”

I don’t see how BIGBOI and goAssets fit into the above. (I hadn’t even heard of BIGBOI bfore this revised proposal.)

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Hi all, thank you for taking the time to provide feedback.

Let me start by sharing our thinking around how to distribute TDR. Firstly we look at the assets that contribute to the metrics to receive our allocation. Secondly we look at how we can incentivise pools that will reward users to bridge assets into Algorand (and those who already bridged) and deploy them to the DeFi ecosystem. Thirdly we work with our partners to identify pools they want to incentivise and get them to contribute to those pools and we match their contributions where possible/sensible.

In the first regard, goBTC and goETH have contributed approximately 12% to our TVL metric and and over 25% of our fees and user metrics. Liquid staking contributed 37% to our TVL metric, and Opul contributed 47%. USDC contributed significantly on users and fees but not in TVL as we use Circle to balance thus keeping capital requirements low.

We have decided not to incentivize Opul pools as they have stated they are moving away from Algorand to other chains.

Although goETH and goBTC are Algomint assets, we have robust activity for those assets through our bridge. They are very well incentivised on the DEXes already but not so on Options. AlgoRai has decent TVL for these assets and we feel that by supporting them (Algomint is also contributing a small amount to these pools) we can attract more TVL from other chains. The total ALGOs allocated to this is approximately 8.9% of our TDR total which is less than their overall contribution to our metrics.

wBNB is an asset that we worked with Tinyman to bridge into Algorand last quarter and initial numbers are encouraging. So we are matching them on the incentive for this pool, and we have plans to work with Tinyman to bridge other notable assets into Algorand before the start of the next quarter. At their request we are not disclosing those assets now to prevent further alpha leak, but this is not the Tiny token as someone mentioned.

BigBoi is a new project on Algorand that will be bridging their token to other chains in the very near future. They will be incentivising DEX pools on Algorand to attract users from other chains to purchase the token and bridge back into Algorand to capture the yield on the Algorand chain. At their request we agreed to contribute to these pools as well to enhance their attractiveness. This has not happened yet but due to the early TDR disclosure we are leaking the alpha for transparency with the community.

The bulk of our TDR (71%) is going to mALGO pools to encourage more users to use mALGO and provide liquidity for it. Although one person above said they would like to seem some TDR go toward the mALGO pool, most have spoken against it so we have not allocated any TDR to the mALGO pool and instead focused it on use cases for the token. Looking at the TDR allocations to gALGO pools from the DEXes, we felt a need to spend more of our TDR here to make the yields for this token very attractive so that more users will adopt mALGO. We will also be watching how BigBoi’s bridging plan works out (and that of xALGO) and if they are successful we could offer mALGO bridged to other chains so users there can acquire the token and possibly be attracted to bridge back into Algorand to get the yields from Algorai and the DEXes. For the mALGO/USDC suggestion, unfortunately these don’t exist currently but it is a good idea to try and incentivise this to get it started so we will be amending our distribution numbers to get it going.

While there have been several critical comments about our plan, we are grateful for everyone’s effort to review it and help us shape it so we can provide greater value to our community. This plan is not final yet and we appreciate those who provide constructive comments and suggestions about where you think we should be allocating towards and not.

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Can you explain to me the mALGO Bear: 78,718 allocation?

As someone that’s only briefly looked at Algorai - I’m not sure how you even speculate on the price movement of mAlgo… doesn’t it only go up with governance rewards?

Or does it work as a proxy for speculating on Algo itself?

And if it is working as a proxy for Algo, why is there no Bull equivalent allocation like for goBTC and goETH?

And I guess likewise for Pepe - why no Bull allocation?

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This is the first I am hearing of bigboi. Do you have information on the creator/dev behind it? Tokenomics? I cannot even find a website by them. Incentivizing them would be an absolute travesty, unless you can provide very clear examples of how they are growing the chain or bringing users. “They will use our bridge” is not good I could make a coin tomorrow use your bridge and then rugpull my coins on multiple chains. This needs to be strongly reconsidered.

Also echoing others. No reason to incentivize algorai for assets that are not your own (goeth, gobtc) they get their own allocation as does Algomint and they can support them if they want.

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