Hello @Cryptex Team, Crypt Keepers and Cryptex community,
I would like to start a discussion about reworking the current and future incentives and work out a proposal together.
The goal would be to increase TCAP supply and in the same time protect CTX holders who believe in the project long term, thus increasing decentralization in the protocol.
The Cryptex Team has 740,000 CTX earmarked for future rewards, liquidity incentives for new Cryptex tokens and strategic partnerships.
It should be noted that this amount wouldn’t come from the treasury, it would come from the team multisig.
The Cryptex DAO has a treasury balance of 4.926 million CTX that will remain locked in our community treasury, only accessible via the passing of a community vote for continued DAO initiatives and incentives.
With the launch on Optimism and Polygon around the corner, I think now could be a great time to rework the incentives!
The current state that we have now:
60,000 CTX allocated to SINGLE SIDE STAKING on October 06, 2021 - will run for 6 months until April.
100,000 CTX allocated to ETH/TCAP LP on October 06, 2021 - will run for 6 months until April.
100,000 CTX allocated to ETH/CTX LP on October 06, 2021 - will run for 6 months until April.
In the past few months we were struggling to pass votes because of the 400,000 CTX required for a quorum on on-chain proposals, multiple times we went to 400,000 staked CTX, then below and up again. Currently we are a few hundred tokens above 400’000 CTX delegated to Crypt Keepers.
With the current state of incentives we are giving more rewards to Liquidity Providers than Single Sided Staking.
On chain data is showing that big liquidity providers don’t hold onto their CTX or restake their rewards in the SSS pool, thus not providing any value to decentralization.
If we want to increase decentralization one approach would be to increase the staking rewards for Single Sided Staking.
Additional to that we could add a delayed release of rewards on LP pairs (or vesting), as suggested earlier by @leo130.
Recently we also added LINK and AAVE as new collateral for vaults, in the future wBTC and Matic are planned.
One point we should also discuss would be: do we want to add more LP pools for TCAP (AAVE/TCAP, LINK/TCAP, wBTC/TCAP, MATIC/TCAP) and add incentives for Liquidity Providers?
I think that could greatly increase the TCAP supply and liquidity, especially if we do it straight on L2 and discount the incentives on L1.
This could position TCAP as the main denominator on L2 and bring more users from different communities to the protocol.
With the current incentives only big holders of ETH are incentivised to mint TCAP and I think we should change that for the benefit of everyone. It should be noted that we don’t have to increase the total amount of CTX rewards, the rewards could be split across the different pairs, this will make CTX more scarce and decrease farming and dumping.
I would like to open this for discussion now. Please feel free to share your insight on how much CTX rewards we want to give out and how it should be split between pools.