[Signal Vote] BIP #12 - A veTokenomic-like Staking Design for B.Protocol

Simple Summary

The goal of this post is to begin the process of formalizing a veTokenomic-like design for B.Protocol

Abstract

veTokenomics refers to a tokenomic design created by Curve Finance. Curve employs two tokens CRV/veCRV (vesting CRV). CRV holders can vote lock their CRV into the Curve DAO to receive veCRV. The longer they lock for, the more veCRV they receive. Vote locking allows you to vote in governance, boost your CRV rewards and receive trading fees. The longer you lock your CRV for, the more voting power you have (and the bigger boost you can reach). You can vote lock 1,000 CRV for a year to have a 250 veCRV weight. Each CRV locked for four years (the maximum years allowed) is equal to 1 veCRV. It is also important to mention that a user’s voting weight decreases linearly over time.

I am proposing a variation on the original veTokenomic design, that retains and rewards users, as well as creating long term stablecoin allocations for all B.AMMs.

Motivation

The community has made clear that it desires BPRO utility, rewards for long term governors of the protocol, and retaining stable liquidity for B.AMMs. Staking is one possible path, and I have long believed that veTokenomics offers an interesting and valuable path for the project.

Specification

Given the structural differences between Curve and B.Protocol some changes must be made to the original design. I propose users can time lock BPRO in the vesting contract as well as tokenized B.AMM stables in exchange for veBPRO and bSTABLE ( vesting bLUSD, bUSDC, etc) tokens for the same durations as veCRV (i.e. up to 4 years with linear decay on both ve/b-assets). The gauges for each B.AMM can be voted on by both veBPRO and bSTABLE in exchange for a share of the BPRO and B.AMM fee emissions. BPRO and B.AMM fee emissions are split 50/50 between bSTABLE providers and BPRO vesting then distributed according to the following:

{ veBPRO voting for the gauge } / {total amount of veBPRO }

or

{ bSTABLE voting for the gauge } / {total amount of bSTABLE }

veBPRO/bSTABLE gauge weight votes will eventually serve two purposes, distribution of BPRO/B.AMM fees and creating an additional layer of stablecoin liquidity that reacts to gauge weights. This bSTABLE pool of B.AMM assets can be used for yield aggregation and liquidity provision during downturns but this functionality should staged, with the initial stage focused only on the vesting.

I also propose using 4 million BPRO over the next 4 years as the emission rewards to gain new users and help procure stable liquidity in all B.AMMs.

Implementation :

This is an informal proposal!

Signaling your support will be the next step to let the team know you want it formalized into code.

Here is a veToken implementation as a starting place. I’ll need some help from @yaron but I think it should be doable to make the above changes relatively quickly.

Proposal:

B.protocol should adopt veBPRO/bSTABLE tokenomic design

2 Likes

Overall, I am in favor of this proposal. However, I don’t think allocating BPRO for liquidity mining is a good idea while the token liquidity is so low. That will just create a token death spiral. I think it’s better to see how much backstop liquidity we can accrue without token emissions, then re-evaluate. Any LM program likely needs to be accompanied with LM for BPRO-WETH as well to reduce downward pressure on BPRO.

2 Likes

Agree we need a LP strategy.

Here is an idea. Let me know what you think.

1 Like

Moving this into the BIPs subcategory as a signal vote

1 Like

hey
@a7om
First of all
great work
I appreciate the effort you made very much

while I am bullish on BPRO
I don’t like the 4-year staking for fees

because it’s a lot to ask from a newcomer to buy and stake for 4 years
I assume the veBPRO would have an aftermarket eventually

but I don’t feel it would be worth a lot more than BPRO itself
so to me, it sounds like going around in a circle
besides more complex & elaborate tokenomics might scare off newcomers
and lastly, I don’t see any real additional value to the DAO or holders
I might be missing something and I would love to be educated If I am wrong,
the basic concept of BPRO as gov token + fees is kind of simple & strong IMO.

for the bSTABLE that’s another topic
separate problem separate motivations
and I am not saying that this is not the right solution
the DAO does need operational funds to work with
I just feel that it needs a separate proposal from the BPRO staking one

I am up for staking in general
and turning on fees

but what I would like to see is more
staking designs
and perhaps staking designs that have real added value to the token holders and DAO
things like:

  • improve liquidity
  • incentivize more lending platforms integrations
  • unlocking some of the capital locked in BPRO for side benefits

and not something that feels like staking for the sake of staking
or to put it in a different way creating fancy hard to reason about tokenomics for people to ape in.
I would like a staking design that actually has some underlying value to add
:heavy_heart_exclamation:

2 Likes

First just to be clear, you don’t have to stake for 4 years. Staking that long just means that you get 100% of the veBPRO/bSTABLE (which degrades linearly overtime to create an long term incentive to continue to buy/stake) and therefore fees/inflation. There are a plethora of vesting strategies that can fit within these mechanics, but the key take away is the max reward is always given to the longest commitment to the protocol, which IMO makes sense. That said, the 4 year term can be adjusted but I believe it to be a good “max” setting.

The ability to tie variable length commitment to protocol revenues in a simple way, that doesn’t also completely disincentivize newcomers is what gives Curves vesting strategy appeal. The vesting strategy is actually pretty simple and straight forward when taking into account the fine tuned balance that must be achieved here.

At the end of the day, we are going to source our liquidity from the crowd and we need to reward them proportionally according to some parameter. Commitment duration seems to me to be the most logical one to use but if you have a different one we should try out I am up to discuss it.

Staking is a broad term, and doesn’t always pertain to long term capital commitment. When focusing on attempting to commit capital, veTokenomics seems the most logical design to me. I do agree that we should have other types of staking that revolve around liquidity provisioning, access to B.AMM stable liquidity, etc but I think they should be considered separately.

Also, there are other interesting things that I think can be done with Curve-like B.AMM gauges that react to user vesting and control liquidity in the backstops/yield strategies/etc.

2 Likes

agree with you, I also think stablecoins are very important to the protocol revenue model.
I don’t know for veTokenomics, Bancor looks like the simplest solution: Single-side staking LP + Impermanent loss protection + auto-compounding fees, even LP fees are protected. They put great tokenomics with multi-utility for BNT, something similar to an idea from @Strategista about win-win staking design. Bpro/stable LP token is also great option, but IL is a big risk

1 Like