SDGP #17: Distribute Liquid Locker Votes Incentives in sdTKN (sdCRV, sdBAL, sdFXS, etc)

Summary:

This proposal aims to enhance the distribution of sdTKN-gauge holders’ vote incentives by utilizing sdTKN instead of SDT. The objective is to bolster the Liquid Locker positions while also supporting sdTKN pegs. The proposed approach involves buying, using Cowswap solvers routes, sdTKN from the market when it’s more profitable to do so and minting sdTKN when the sdTKN-TKN is at peg. This system is expected to reinforce the stability of sdTKN’s peg and improve Liquid Lockers’ overall position.

It also aims at facilitating the process of claiming and distributing vote incentives, to enable its full automation (and in the long term decentralisation).

Context:

For more than a year, Stake DAO has been distributing bi-monthly vote incentives rewards based on sdTKN voting powers. Currently, the vote incentive rewards are exchanged for either SDT or sdTKN if the peg is below 99%, in accordance with #SDGP 13: Distribute Liquid Locker bribes in sdTOKEN if the pool sdTOKEN:TOKEN peg is below 1:0.99 2. These rewards are then distributed to eligible sdTOKEN-gauge holders.

Motivation:

The primary motivation behind this proposal is twofold. Firstly, it aims to support the growth of Liquid Lockers’ positions, strengthening the overall position of the project. At current rates, the CRV Liquid Locker will bi-weekly lock an additional 300,000 CRV or 7,000,000 CRV over a year.

Secondly, it intends to maintain the stability of the sdTKN peg. By using vote incentives to buy, using Cowswap solvers routes, sdTKN from the market when it’s more profitable or minting sdTKN when the sdTKN-TKN is at peg, the proposal seeks to balance and stabilize the peg.

In conclusion, adopting this proposal (SDGP 17) is expected to provide dual benefits of improving the stability of sdTKN’s peg and bolstering Liquid Lockers’ overall position. The utilization of sdTKN for distributing vote incentives rewards presents a promising solution that aligns with the objectives of Stake DAO.

It also aims at facilitating the process of claiming and distributing vote incentives, to enable its full automation (and in the long term decentralisation).

Means:

Human resources: Minimal developer time needed Treasury resources: No treasury resources needed Technical Implementation: Use Cowswap solvers buy/mint routes for sdTKN

Proposal specifications: Admin: veSDT holders Community feedback: 2 days minimum Voting Duration: 5 days