Summary

As part of our ongoing commitment to fostering community engagement and strengthening f(x)’s TVL, we propose a significant change to our booster program. Over the past period, the outcomes in terms of TVL growth have been below expectations. To address this challenge, we advocate for a strategic reallocation of resources, dividing the booster allocation into two parts: one for the booster program and the other for a referral system aimed at augmenting our TVL.

Background

So far f(x) protocol’s Booster Program has distributed to our community 10,000 FXN. At the current market price that is over USD $2,000,000. Despite this, we have observed a stagnation in TVL growth. This stagnation not only poses a threat to our platform’s sustainability but also impedes our ability to attract new users and retain existing ones. In light of this, it is crucial that we reassess our approach and explore innovative strategies to invigorate our TVL.

Motivation

There are two key objectives the team proposes this approach.

1. TVL Growth: The primary objective of this proposal is to enhance f(x) Protocol’s TVL. By allocating resources towards both the booster program and a referral system, we aim to stimulate liquidity provision while simultaneously expanding our user base. This dual approach fosters sustainable growth in TVL over time.

2. Community Engagement: The continuation of the booster program ensures ongoing support for our existing community members. By maintaining incentives for participation, we demonstrate our continuous commitment to rewarding community engagement.

Implementation

1. Booster Program Reallocation: We propose dividing the current allocation for the booster program in two parts: one part will continue to support the booster program, incentivizing community participation and awareness. The other part will be redirected towards a new referral system aimed at expanding our user base and increasing TVL.

2. Referral System Implementation: The introduction of a referral system will enable us to leverage our existing user base to attract new users. By incentivizing referrals, we can tap into networks beyond our current reach, driving organic growth in TVL. This referral system will reward both the referrer and the referred user, creating a mutually beneficial incentive structure.

The proposed allocation is 500 FXN per month for the Booster Program and 2,000 FXN per month for the referral system.

Booster allocation:

We believe that the current voting system that relies solely on governance voting may lead to unfair rewards distribution due to lack of impact measuring and qualitative KPIs and the weight of vlCVX voters.

We propose that any booster has to register for each tranche, highlighting their work. Instead of a governance vote, we propose that the Aladdin DAO core contributors and A Team decide the rewards distribution, taking into account the impact each booster had. A Team members can opt to be part of the Booster Program. If they choose this, they will cease the decision power over the rewards distribution.

Referral System

Creating a referral link is permisionless.

After the forum discussions which can be seen here https://forum.aladdin.club/t/fip-04a-temporary-restructure-the-booster-program/505 , we propose the following referral system:

• Introduction of a points system (called FX points)

• Introduction of 3 monthly milestones for TVL Growth and a Default Reward if none of the milestone is reached

• Introduction of a tiered bonus system for users that reach certain FX targets

FX Allocation:

4 FX/day for 1 fToken staked in any Stability Pool

2 FX/day for 1 xToken held in wallet.

We propose a 50% - 50% FX split between referrer and referral.

Default Reward:

• 30 ETH increase for 4 FXN; Total FX points: 3036003*30 = 9.72M => 1 FX = 0.0000004115

Monthly Milestones:

• Milestone 1: 3K ETH increase 400 + 4% extra = 416 FXN reward; Total FX points: 3000 ETH 3600 (ETH price) * 3(avg point per dollar)*30 = 972M => 1FX = 0.000000428 FXN

• Milestone 2: 6K ETH increase 800+ 10% extra = 880 FXN reward; Total FX points: 6000 * 3600 * 3 *30 = 1944 M => 1FX = 0.0000004527 FXN

• Milestone 3: 9K ETH increase 1200 + 15% = 1380 FXN reward; Total FX points: 9000 * 3600 * 3 * 30 = 2916M => 1FX = 0.0000004733 FXN

Tiered Bonus System:

-1% extra FX for 2,000,000 FX

-2% extra FX for 4,000,000 FX

-3% extra FX for 6,000,000 FX

-4% extra FX for 8,000,000 FX

-5% extra FX for 10,000,000 FX

Pooling:

For - I support the introduction of the referral system

Against - Do nothing