Proposal Allocate 50% of our vlCVX voting power to collect bribes. Income from the bribes will go towards the community treasury to lengthen the development fund runway.
Problem Silo purchased ~250k CVX with the aim of locking these tokens to direct $CRV rewards to our SILO:FRAX Pool to incentivize liquidity. The idea was that high APY through maximum vlCVX allocation (combined with allocation by Frax) would be sufficient to incentivize liquidity however this has proven not to be the case with our pool having $1.4m TVL despite 66% APY.
Whilst liquidity in a healthy market is important to supplement high trading volumes, trading volume is significantly lower during bear markets. This means that incentivizing liquidity during bear markets is a lesser concern. Since vlCVX could instead be used to collect bribes, there is an opportunity cost for continued full allocation to the SILO:FRAX pool.
This brings us to our three main problems: High APY for the SILO:FRAX Pool has not resulted in high TVL Bear markets have less need for deep liquidity vlCVX could be used to collect bribes instead
Solution Currently, we are allocating 100% of our vlCVX to the SILO:FRAX pool. Given high APY has shown to have little effect on TVL and bear markets have less need for deep liquidity, we propose decreasing the allocation percentage.
The vlCVX that is not used to incentivize Curve liquidity will be used to collect bribes. The last round of bribes generated $0.07 per vlCVX. Whilst this is only a modest amount, it can be used to benefit the DAO much more than incentivizing the pool during a bear market.