LIP-004 : inSPIRIT vote allocation for the [FRAX-FTM] pool

Frax aims to be the first stablecoin protocol to implement design principles of both to create a highly scalable, trustless, extremely stable, and ideologically pure algorithmic on-chain money. FRAX Finance is expanding to other L1’s, the initial goal is to expand their offering on Fantom and build a close collaboration with LiquidDriver to bootstrap liquidity. A medium article will come up later as we strengthen our partnership

Learn more about FRAX : https://docs.frax.finance/

Rational/Justification:

• Through mutual familiarity it made sense that we could mutually benefit from this partnership and thus the proposal was initiated, that FRAX Finance team would “Bribe” LiquidDriver into voting in favour of their pool [FRAX-FTM]
• The Bribe infrastructure is not yet rolled out and thus the creation of an xDAO fund is needed;
• This would be our first “bribing” event and part of the roadmap.

Frax Finance “Bribe”: The bribe is based on Votium and on their analytics Dashboard (https://llama.airforce/#/votium/rounds/9) it is shown that protocols received on average $1.97 of emissions per $1 spent on bribes. 

FRAX Finance’s offer is as follow : 

• 1 week time-weighted average of spirit's price to assess how much emissions in $ we bought through inSPIRIT votes
• Once per week FXS will be sent to our fee distributor based a rate of $0.5 Bribe / $1 of spirit emissions 

Weekly pay is the norm and per the emissions/ inSPIRIT voting cycle. 

Verbal Agreement:

• Goal of Frax Finance is to initially reach a pool size of $5m. LiquidDriver would allocate between 5m to 8m inSPIRIT votes to their boosted farms to help them achieve the targeted $5m in liquidity to start with but the objective of reaching $15m as soon as possible;
• LiquidDriver would also open a FRAX-FTM pool on LiquidDriver to capture the revenue.

Benefits :

1. Allows the DAO to have a treasury balance to accumulate bribed $FXS which in turn would generate yields that could be redistributed to xLQDR holders.
2. FRAX signalled its interest in acquiring xLQDR in the near future, accumulating FXS in the DAO fund would allow us to align our incentives even more and would allow us to generate more yields for xLQDR holders in the long run.
3. First instance of a “Bribe” for inSPIRIT emissions.
4. New partnership with a tier 1 stablecoin where we would be the first step of a long term partnership where we aim to put frax in front of the stablecoin scene on Fantom.

Considerations/Risks :

1. inSPIRIT is not used to increase emissions on LQDR-FTM pool; it can be alleviated by opening a FRAX-FTM pool.

How to mitigate the risks :

1. The opportunity cost is more than off-set by the partnership that is created with FRAX Finance and the potential synergies both platforms will achieve on Fantom.

Before making any final decision feel free to discuss the proposal in the xDAO section of our discord http://discord.gg/LiquidDriver