MIP - 3

PROPOSAL OUTLINE Attract additional liquidity providers for the Hercules Vault by beginning modest token incentives that will be sourced from the token tax pool.

SPECIFICATIONS Use 0.05% of the Max Supply OR 500,000 xMOZ sourced from the token tax pool as direct incentives for liquidity providers (LPers) to the Hercules Vault.

To be distributed through Camelot’s Nitro Pool by staking the mozLP token ON ARBITRUM. To receive token incentives a user would need the mozLP (Hercules) token (on Arbitrum) and to stake it on Camelot.

Distributed over one month.

No new token emissions.

One Month Estimate: Emissions APY = 24% (based on $100,000) Vault APY = 7.5% Total Hercules APY = 31.5%

Start date to be announced if approved. There will be at least one week preparation time from approval.

JUSTIFICATION The protocol must retain the interest of current vault depositors while attracting additional LPers.

However the MozaicDAO must be aware of simple ‘liquidity mining’ incentive programs and their inability to retain LPers in the long term. Mercenary capital may be attracted to larger incentive based programs.

SEE HERE: https://coinmarketcap.com/academy/glossary/mercenary-capital

However, with the Hercules Vault seeing growing interest, the MozaicDAO must also recognise the need to incentivise additional LPers while also dually rewarding early LPers of protocol, in a fair and justifiable manner.

OVERALL COST Total cost over one month: Approx. 0.004 x 500,000 = $2,000

TIMEFRAME Discussion/Temperature check - 48 hours (closed) Draft proposal - 48 hours (closed) Snapshot Voting - 72 hours

STEPS TO IMPLEMENT 
 Upon MIP approval, the core contributors will:

1. Coordinate with Camelot to whitelist the Nitro Pool to allow xMOZ to ONLY be transferable from that pool
2. Announce details for the token incentives start date
3. Convert 500,000 MOZ to xMOZ from the token tax pool

4. Establish the Nitro Pool for the mozLP (Hercules LP) token and deposit 500,000 xMOZ as incentives

CONSIDERATIONS Voting: 1 xMOZ = 1 vote.

Quadratic Voting method has also been considered and may be implemented in the future, based on DAO sentiment and voting outcomes etc.

Quorum threshold (2,000,000 xMOZ) - maintained.