Mid- to long term yield distribution framework with market cap tiers

Overview

PRFC-9 determined "Buyback and Distribute $PLS" as the preferred method for bPLS yield distribution. To move towards a more dynamic and automateable yield distribution, we propose incorporating a dynamic framework that adjusts yield distribution methods based on Plutus’ market cap.

This proposal aims to provide a framework within which bPLS can dynamically adjust rewards to balance price support, diversification, and ecosystem growth while aligning with the protocol's maturation.

Objective

Establish market cap thresholds to dynamically modify the yield distribution method and introduce new options once the protocol changes market cap tiers.

Thresholds and Corresponding Actions:

All tiers will buy back plsASSETs with plsASSET underlying assets. Market cap tiers can be modified / added / removed by future governance proposals.

Market Cap < $5 million: Price support through consistent buy pressure

• Allocate 100% of yield towards buyback and distribution of $PLS for price support

This is the current state in which we follow the results of PRFC-9.

Rationale: Prioritize early-stage $PLS growth with high buyback pressure.

Market Cap Between $5 million and $50 million: Introduce options for diversification

• Methods in the tiers above

• Distribute x/y/z PLS/Blue Chip/Burn:

  • Allocate x% of yield towards buyback and distribution of $PLS for price support.
  • Allocate y% of yield towards Blue Chips (ETH, BTC) to attract long-term holders and hedge risk.
  • Allocate z% of yield towards buying back and burning $PLS

  Default values (before contract is finished):* x=69, y=20, z=10

  Rationale: Strike a balance between supporting $PLS and diversifying yield for greater stability based on bPLS votes.

Market Cap > $50 million: Blue Chip and Strategic Options

• Options include:

  • Methods in the tiers above
  • Buyback plsASSETs: A certain percentage of non-plsASSET backing yield to buy back and distribute plsASSETs.
  • 100% Blue Chip Distribution: Prioritize stability and diversification for larger holders.
  • 50/50 Blue Chip and Buyback: Increase Blue Chip allocation but keep buying back $PLS for burns/distribution.
  • Other community driven methods: Through community engagement with governance any other models can be proposed and implemented

  Defaults to 5-50M mcap method if gauges are not implemented before threshold is hit.

  Rationale: Increase stability by diversifying the yield methods while keeping several options for dynamic balancing through gauges.

Implementation

Setting a longer term plan to cement both control of future actions and implementation of the decided models.

Governance Oversight:

Regular reviews of market cap to assess threshold crossing. To be automated with yield distribution contracts and on chain data.

Community votes on further adjustments or new mechanisms. To be streamlined with bPLS gauges for dynamic handling.

Operational Requirements:

Automation of yield allocation across methods and improved control for bPLS through gauges as part of a bPLS rework. Prioritizing better LP options and control over yield and rolling them out first.

Conclusion

By introducing market cap thresholds and adaptive distribution methods, Plutus can effectively balance price support, ecosystem growth, and long-term holder incentives.

By deciding the thresholds we can create a framework where the productive treasury works to improve the size and stability of the PlutusDAO.

Proposal

Implement market cap tiers and corresponding yield distribution methods and start developing automated contracts for distributing rewards and controlling distributions through gauges.

Options:

• FOR: Implement as proposed
• AGAINST: Do not implement as proposed
• ABSTAIN: Count towards quorum without taking a stance