How should we allocate Percent’s remaining rewards?

How should we allocate Percent’s remaining rewards (https://etherscan.io/address/0x79faee4b277d07ce23e2387ef67ef45acc62f156)?

The first two phases of Percent finance have been a wild ride, but the main objectives have been met: the ownership of the protocol has been distributed, and a group of strong-handed believers has emerged who value the creation of a global financial commons. We are so grateful to have this organically-formed community, and now we need to expand the developer team, grow the money markets, build new financial products and integrate with other dApps. This vote is about making it happen.

Over the past several days we've had rigorous discussion on our community forum about how to allocate the remaining 2,847,525 PCT out of our hard-capped 20,000,000 supply. The guiding goals here are: a) we want to incentivise real use of our money market over the medium- and long- term, while b) also retaining some capital to pay for expanding the team to multiple devs.

Our roadmap forum discussions here can provide more context: https://gov.percent.finance/t/future-roadmap-proposals

As we move forward, we have three options we would like to share with community. Please remember that any holder of PCT can vote on these options with just a signature (no gas fee), and since we use a quadratic system, even small holders matter! The options are as follows:

1. Allocate 100% of PCT to money market rewards in a targeted manner where only specific markets are incentivized. We are currently considering stable-coin only incentives. Read more about it here [https://gov.percent.finance/t/stablecoins-are-the-center-of-the-universe]. The idea here is that we target the real users of money markets by becoming the most attractive place in DeFi to lend and borrow stablecoins. The amount of PCT offered as rewards and the markets that we incentivise will be revisited monthly by our multi-sig community reps to target a healthy APY on lending and borrowing (like, say, 5%). This allows us to use the token more effectively over time if it appreciates in price i.e. we don’t want to needlessly give out too many tokens if our valuation increases. That said, all PCT will be handed out to the community, it is just a matter of being strategic over different time periods. The downside to this approach is we don’t save any of the token for the "developer option pool," and instead rely on the protocol reserves to fund dev team expansion.

2. Allocate 100% of remaining "Treasury" PCT to a 75% PCT – 25% WETH pool on Balancer from which the PCT for money market incentives is withdrawn on an on-going basis. This approach builds on what is outlined in option 1 such that we continue our emphasis on incentivizing money markets, while holding most of the Treasury funds in a Balancer pool that is controlled by community reps via multi-sig. This would generate additional revenue in BAL to fund development, while also offering the advantage of maintaining token liquidity. In this scenario we would also include a 1% fee on the pool. Reward amounts for the money market will be revisited monthly as per above. PCT holders will be able to join the pool and make additional returns on their tokens and ETH in the form of trading fees and BAL rewards, while being partially protected from impermanent loss by skewed token weights in the pool.

3. Combine options 1) and 2). Allocate 2 million PCT directly to money market rewards as in option 1 and complement this with a smaller pool on Balancer that includes the remaining 847,525 PCT to the same 75% PCT – 25% WETH breakdown and a 1% trading fee. The PCT rewards can be allocated to the targeted markets and revisited on a monthly basis, as outlined in option 1, and the Balancer rewards from the pool would be kept to fund developer talent over the next year and onward. We can also use the PCT from the pool for dev or user incentivization in the future. PCT holders will be able to join the pool and make additional returns on their tokens and ETH in the form of trading fees and BAL rewards, while being protected from impermanent loss by skewed token weights in the pool.

For some calculations behind the different options, please look here: https://docs.google.com/spreadsheets/d/1SAGH1nS9fN44XdCUefjKUM4AMCb1MVPMO9Fu39sDhU8/edit#gid=977000331

For some rationale behind the options also check: https://gov.percent.finance/t/phase-iii-rewards-distribution-proposals https://gov.percent.finance/t/proposal-for-bullish-high-fee-pct-weth-balancer-pool-using-pct-reserves https://gov.percent.finance/t/future-roadmap-proposals