Similar to the previous proposal, and in order to better align users’ incentives with the growth of the protocol, it is proposed that a UMA’s KPI Options program will be used for a KPI-based LM.
For this purpose, 90k BPRO from the DAO Reservoir account will be deposited as collateral to mint 90k BPRO UMA Option tokens (ERC20), that will be distributed to Users according to the same conditions as the previous LM - 80/20 for debt/deposit on Maker and Compound v1 integrations, and full rewards for Liquity’s deposits (see numerical example below).
A floor price of 33% will be set and the options will mature after 3 months at the end of the 2nd LM phase (block number will be set once this proposal will go live as a Snapshot vote).
- If the TVL of B.Protocol reaches or exceeds $150m, the options will mature to 100% (1 BPRO per option).
- If the TVL fails to reach $150m the option will mature at the floor price (0.33 BPRO per option), and the remaining 60k BPRO will be returned to the DAO Reservoir account.
To better understand the distribution ratios, here is a numerical example according to today’s TVL (rounded) -
- Maker + Compound total deposit = $50m → *0.2=10
- Maker + Compound total debt = $10m → *0.8=8
- Liquity deposits = $10m → *1=10
These 10/8/10 are the normalized weights that will determine the allocations of the LM rewards, according to the total amount and time the funds were locked in B.Protocol.
The snapshot for the beginning block number of the BPRO LM 2nd phase will take place once this proposal is put up for a Snapshot vote and will not include retroactive rewards.
*As BPRO already got whitelisted on UMA and as the UMA DAO passed a “generic identifier” last month, this implementation can be executed without any further UMIPs submissions.
Result if passed - Deposit 90k BPRO from the DAO Reservoir into a BPRO KPI-Option program on UMA that will take DeFi Llama as its TVL source.
- KPI - $150m TVL.
- Floor price of the option - 0.33 BPRO.
- Fully matured price of the option - 1 BPRO.
*Edit - Removed the requirement to implement a BPRO staking mechanism before these rewards will be distributed (as was mentioned in the original proposal discussion by mistake).
**For the full discussion over this proposal please check this thread -