Weekly Voting Incentive Program to promote liquidity and DEX adoption
A PI/Reflexer based protocol can be confusing due to the more flexible USD peg and redemption rate, it has shown that it can have bigger adoption in a smaller ecosystem. A factor that HAI has highlighted is their adoption of Velodrome and is a key pillar in their HAIwheel Effect plan .
At this time, a similar protocol on Optimism, HAI (as of analytics page on 11/15/24):
- $3,849,317 Total Collateral Locked (about 1238 ETH in value)
- 1,238,047 Outstanding HAI
- 157 Active Vaults
- $849,115 in HAI Liquidity Pools
- $33,700 Projected Annual Earnings
In comparison, Open Dollar (as of analytics page on 11/15/24):
- $356,270 Total Collateral Locked (about 115 ETH in value)
- $154,837 Outstanding OD
- 100 Active Vaults
- $72,436 in Camelot Liquidity
- $2650.28 Projected Annual Earnings
A contributing factor to HAI’s adoption is the focus on bribes for Velodrome. Ramses does have a much lower TVL than Camelot and other Arbitrum DEX’s but is the 4th highest in Cumulative Volume and a much higher volume/tvl than Camelot, LFJ, Curve, Balancer, and others.
The results of the previous incentives are unclear or possibly not impactful but it is worth experimenting with a different approach. That would start a similar flywheel between Ramses and Open Dollar.
**Current Ramses pools are:**
CL has proven to be a more efficient model for volume but it does require more active management or trusting a third party like Ichi or Gamma. Giving OD and ODG holders additional legacy pools might be a great option for vault keepers that would also like to LP. Moving to a voting incentive model over a direct liquidity model will help distribute to the Ramses voting power into OD and ODG vault keepers who are willing to provide liquidity.
On both Camelot and Ramses, there is little demand for OD/USDC volume. Based on this, the following pools with the listed weekly voting incentives for Ramses for a total budget of 4000 weekly ODG for a 26 week experiment with a total 104,000 ODG voting incentive budget from the DAO treasury:
If there’s a proven impact, the community should explore incentives for pairs with Nerite as well as Liquity (bridged BOLD), these would be a different budget and proposal once these launch in the coming months.
Motivation -
The Open Dollar community should implement the proposal to increase OD liquidity, trading volume, and adoption.
Steps to Implement -
There should be a review of similar Short Term Liquidity Incentives for the steps taken by the DAO - https://commonwealth.im/open-dollar-governance/discussion/17177-short-term-liquidity-incentives-round-1
However, these are not LP incentives but Voting incentives.
There also should be marketing/communication efforts in the current social channels so the Arbitrum and Ramses community are aware of the current voting incentives.
Timeline-
Voting incentives should start within the next epoch if this proposal does pass.
With the change of minter/vault keeper rewards and voting incentives, we would want to set goals and measure the impact. These are some suggested metrics as some guidance for goals:
6 months goals from launching:
Total collateral locked in ETH value - 400 ETH
Total OD minted 550,000
Total DEX OD Liquidity $245,000
If these goals are not reached there should be a proposal to alter this program based on collateral usage.
12 months goals
Total collateral locked in ETH value - 1000 ETH
Total OD minted 1,250,000
Total DEX OD Liquidity $750,000
After the 12 month program, we should look at the impact of OD minted and Total DEX OD Liquidity as a measure of increase of both per ODG value for minter and voting incentives.
Overall Cost -
The total cost is 104,000 ODG from the DAO treasury fund. There also would be a cost to implement a script for funding the weekly voting incentives or DAO operations cost to funding the weekly voting incentives. If a script or weekly DAO transactions are not feasible, I would be willing to coordinate a voting incentive Safe with signers of other delegates, community members, or a group (like the DeFi Collective) that already perform similar weekly operations.
