Long Term Liquidity Incentives

Proposed by @monet-supply.

Background

PASTA liquidity has improved considerably since the last liquidity incentive program was conducted, with nearly 2 million PASTA now held in the Uniswap v2 pool. However, this still represents less than 15% of the total token supply.

One potential issue is that regular Uniswap LP fees may not be enough to offset impermanent loss from occasional large changes in the PASTA/ETH price ratio. Adding predictable, long term incentives should help counterbalance this effect and support greater participation.

Proposal

I propose initiating a new liquidity incentive program, distributing 300,000 PASTA tokens to the Uniswap v2 PASTA/ETH LP over 3 months. Funds would be distributed directly to the Uniswap Pool via a Pasta Chef contract like the first distribution.

The PastaDAO multisig currently holds 1,219,000 PASTA, of which 190,000 have been committed to previously approved expenses but not yet issued (90,000 for development grants, 100,000 to be transferred to the DAO timelock). So this proposed 300,000 expense would represent roughly 30% of the multisig's remaining funding over the next 3 months. During this time, additional fees from PASTA transfers or sales should partly offset this expenditure.

Next Steps

If this proposal is approved by voters, the multisig will fund a liquidity incentive distribution mechanism with 300,000 PASTA from the treasury for a 3 month distribution period. Notice will be given to the community in Discord in advance of when the rewards period begins.

Proposal Question

Do you approve transferring 300,000 PASTA from the DAO multisig for this 3 month liquidity incentive program?