yield.finance.vote: liquidity mining meets governance

Abstract

Yield is a dApp that utilises radical cryptoeconomics to build a competitive yield environment, whereby liquidity providers hold “property” in the protocol and earn a “resident income”. LPs pay a Harberger Tax by burning a small fraction to their LP tokens and new users can obtain a staking slot by paying a higher tax than a current occupier.

Introduction

The DeFi space underwent rapid expansion in 2020 due to the introduction of a number of new decentralised financial primitives. One of the most important was liquidity mining.

“There’s no such thing as a free 120,000% APY lunch”

Yield

In this post we introduce Yield, a new dApp in the finance.vote ecosystem, that generates “perma-liquidity” and creates tunable parameters that will provide $FVT holders with the ability to govern each “pulse” of liquidity rewards to LPs.

Protocol Property

Staking slots in Yield can be conceptualised as property on the finance.vote protocol, where the protocol can be seen as a digital commons governed by those holding the $FVT token.

Harberger Tax

The Harberger Tax is a theoretical economic idea that is designed to improve allocation efficiency of assets. That is, assets are allocated to those who are most likely to use them, rather than those most likely to hoard them. This is a desirable outcome for governance tokens, which are best allocated to active participants in governance decisions.

Perma-liquidity

The creation of automatic market makers (AMMs) and the provision of liquidity in decentralised markets has been revolutionary for the cryptospace. However, permissionlessness comes at a cost.

Would you burn $100 to get $200 back? What about $180?

Pulsed Liquidity Mining

In order to provide $FVT token holders with the ability to govern the emission of the $FVT token rewards to liquidity providers, tokens are issued to LP stakers in “pulses”.

$FVT holders will decide what the next pulse looks like

Liquidity Mining Meets Governance

The Yield contracts are built with parameters that will be controlled by the $FVT token holders. It is intended that each pulse will initiate immediately following the pervious and the mining parameters will be set by quadratic vote within the ‘Influence’ snapshot voting dApp to be released in time for pulse 2 of the Yield liquidity mining incentive.

Dials over dialogue
  • Pulse length (number of blocks in the pulse)
  • Number of pools
  • Number of properties per pool
  • Pool deposit minimum
  • Pool burn rate minimum

Rules of the Game

  • Any user can occupy a slot and claim their protocol property with any amount of LP tokens acquired by providing liquidity in the $FVT uniswap pool.
  • In Pool 1, (Orca) there is a minimum deposit of 10 ETH equivalent in value of LP tokens, in Pool 2 (Krill) there is no minimum deposit.
  • Orca will have 30 slots and obtain 80% of cycle rewards and Krill (50 slots) will obtain 20%.
  • The game begins with zero tax. However, once slots are full you must acquire a slot with a higher deposit and burn rate than the current occupier.
  • Burn rates can start at any amount from 1 wei per block.
  • You can withdraw your earned $FVT at any time.
  • You can withdraw your LP tokens at any time, less your burned stake.
  • Play the game or don’t, it’s up to you.

An example

  • Alice arrives at the Yield dApp as an existing LP for the FVT-ETH pool on uniswap. There are several free slots available and she claims a property by staking a 12 ETH equivalent of LP tokens and setting a zero burn rate.
  • Bob arrives a day later and sees that all the slots are occupied. However, he sees that Alice has set a zero burn rate and acquires Alice’s property by providing 12.1 ETH of deposit and a 100 wei / block burn rate.
  • Alice checks the Yield dApp and see’s she has missed out on 3 days of $FVT rewards. This time she submits her 12 ETH LP deposit into Clive’s slot (10 ETH, 0.5 Gwei/block) and sets a 3 Gwei / block burn rate, putting her in the middle of the pack and securing her property for this pulse and the next.

Wen Yield?!

The Yield contracts have succesfully passed audit from a sector leading security firm and an excting user interface is in the final stages of development and testing. The launch date for the Yield dApp will be announced in our telegram group and early access will be granted to our citizens (holders of a finance.vote decentralised identity token).

Disclaimer

Liquidity provision is for advanced users only. Our smart contracts have been professionally audited by a sector leading security firm, however there is no such thing as a 100% safe contract. LP tokens burned are locked in the $FVT Uniswap forever. Orca and Krill yield pools are for advanced users only, use at your own risk.

finance.vote public channels

Official Website: https://finance.vote

The consensus layer for #DeFi. Building the dApp suite for the decentralised future.