MGP-16 | Restructure MIMO Token Liquidity & Incentives on Ethereum and Polygon PoS

Summary: This proposal seeks to restructure MIMO token liquidity & incentives on both Ethereum and Polygon PoS.

Rationale: Following MGP-14, MIMO liquidity incentives are now dedicated to:

Ethereum:

• MIMO/e-cs-kp-usd 80/20 (Balancer)

Polygon PoS:

• MIMO/p-cs-kp-usd 80/20 (Balancer)

We propose to switch the MIMO token liquidity incentives to liquidity pools paired with wETH instead of USD stablecoins (wUSK/paUSD/USDC). Below are the proposed new pools on each chain:

Ethereum:

• MIMO/wETH 80/20 (Balancer)

Polygon PoS:

• MIMO/wETH 80/20 (Balancer)

Here's the rationale behind this proposal:

• Positive Impact on MIMO Token Value: In bullish market conditions, pairing MIMO with wETH can have a positive effect on the value of the MIMO token. wETH is a well-established and highly traded cryptocurrency, and liquidity providers (LPs) in the MIMO/wETH pool can benefit from potential price appreciation of both MIMO and wETH, leading to higher returns.

• Attracting Liquidity Providers: During bullish phases, there is often a higher demand for participating in crypto markets, and LPs may find it more attractive to pair their assets with wETH rather than stablecoins. The prospect of earning BAL/AURA rewards (via votes incentives on Paladin) while participating in an wETH pairing can incentivize more LPs to contribute liquidity, which in turn deepens the pool's liquidity.

• Enhanced Capital Efficiency: A MIMO/wETH pool provides LPs with exposure to two assets with growth potential, potentially increasing capital efficiency compared to traditional stablecoin pairings. This can be particularly appealing to LPs looking to maximize their returns.

• Market Resilience: During market volatility, stablecoin pairs may experience reduced trading activity due to the desire for stability. In contrast, a MIMO/wETH pool can offer resilience, as wETH is a leading cryptocurrency and can attract traders even during turbulent market conditions.

Breakdown of adjusted MIMO tokens incentives:

Ethereum: (80% of MIMO incentives)

• vMIMO holders: 5%
• Liquidity Incentives: 95%
  • wUSK/paUSD/USDC: 40%
  • wFRK/PAR/EURC: 35%
  • MIMO/wETH: 20%

Polygon PoS: (20% of MIMO incentives)

• vMIMO holders: 5%
• Liquidity Incentives: 95%
  • wUSK/paUSD/USDC: 40%
  • wFRK/PAR/EURC: 35%
  • MIMO/wETH: 20%

As voted in MGP-14, liquidity incentives will be distributed via votes incentives on Paladin.

Note: It will only be possible to vote incentives pools if the DAO gets gauges on pools. This decision depends on Balancer governance. If we are unable to obtain gauges on the selected pools, the option to build our own staking contract will automatically be chosen.

Means:

• Human Resources: Multisig signers will need to execute transactions to restructure MIMO Token liquidity & incentives on the Ethereum and Polygon PoS multisig.
• Treasury Resources: No cost for the treasury to restructure MIMO Token liquidity & incentives on the Ethereum and Polygon PoS.

Technical Implementation:

Ethereum:

• Create a MIMO/wETH 80/20 weighted pool with these parameters:
  • Pool name: 80-MIMO/20-wETH
  • Pool symbol: 80-MIMO/20-wETH
  • Pool type: Weighted
  • Swap fee: 0.3%
  • Pool Owner: Delegate Owner (Balancer DAO)
• Deposit MIMO votes incentives on Paladin each Aura gauges weights round in accordance with voted MIMO tokens incentives repartition.

Polygon PoS:

• Create a MIMO/wETH 80/20 weighted pool with these parameters:
  • Pool name: 80-MIMO/20-wETH
  • Pool symbol: 80-MIMO/20-wETH
  • Pool type: Weighted
  • Swap fee: 0.3%
  • Pool Owner: Delegate Owner (Balancer DAO)

Voting options:

• For the restructuration
• Against the restructuration
• Abstain

Authors: @JeanBrasse from Mimo Labs