Grow POL on Optimism by leveraging Stargate's veVELO vote power on Velodrome

Background

This proposal aims to maximize the economic upside of Stargate's Protocol Owned Liquidity on Optimism leveraging Stargate’s veVELO position. Deploying these assets strategically can allow Stargate to increase the yield on its POL, earn a one-time Velodrome partner bonus of 10K OP tokens (~$30K at current valuation) vested over 1 year, and grow its treasury on Optimism. Details below.

Proposal

Velodrome is the central trading and liquidity marketplace on Optimism. Velodrome distributes VELO emissions to liquidity pools weekly based on votes by veVELO (vote-escrow VELO) holders. Protocols can use veVELO vote power or voter incentives (bribes) to attract votes and emissions for their liquidity pairs. Voter incentives consistently attract $1.75 to $3 in VELO rewards to pools for every $1 deposited, offering a multiplier effect for protocols. Stargate is uniquely positioned to benefit from this multiplier, as it owns 80-90% of the STG-USDC liquidity on Velodrome, allowing it to capture 80-90% of the resulting VELO rewards. For every $1 in incentives, Stargate could capture $1.4 - $2.5 in rewards each week. Stargate can also leverage Relay, Velodrome’s veVELO automation layer, to vote for STG-USDC perpetually, compound veVELO rewards, and direct VELO emissions to Stargate’s POL at zero cost to Stargate. Stargate currently holds approximately 8M in veVELO, 1.6M VELO in LP rewards, and $5M in POL for STG/USDC on Velodrome pools, of which $3.2M is auto-compounding through Yearn’s vault. Stargate has also claimed 10K OP tokens through veVELO votes in the past 6 months, which it can redeploy to extend its reward program on Velodrome. To maximize the combined impact of these assets, Stargate can take the following strategic actions: Lock the VELO to increase Protocol Owned Votepower position to ~9.5m veVELO and instantly qualify for a one-time 10k OP partner bonus Deposit all veVELO into Relay and establish a voting strategy for STG-USDC to perpetually direct VELO rewards to the pool – the Velodrome team will share instructions Deposit 2K OP tokens per week for a period of 5 weeks to attract veVELO votes for STG-USDC, boosting the pool’s yield to further grow Stargate’s POL Maintain current staked POL on Velodrome and Yearn – claim the resulting VELO rewards every 4 weeks, lock as veVELO and deposit into Relay to grow votepower Combined, these steps will boost Stargate's earnings from POL. The 1.6M veVELO will allow Stargate to direct an extra ~$1.2K in weekly emissions to the STG-USDC pool, while the $4k in weekly incentives could result in an estimated $10K per week of rewards on Stargate’s $5M POL. Most of these rewards will automatically grow Stargate’s POL through Yearn. The proposal aligns with Stargate’s mandate to incentivize liquidity if the resulting rewards can yield $1.5 for every $1 deployed.

OP GovNFT Program

The GovNFT is an OP position vested over 1 year that allows participation in governance, with an estimated value of $40K. This would provide an additional boost to Stargate's program.

Execution -Stargate will claim pending VELO rewards on Velodrome. -Stargate will lock the claimed VELO as veVELO and deposit its veVELO into Relay. Velodrome will create a Relay strategy which will continuously vote for STG-USDC and compound rewards into additional veVELO. Velodrome will provide detailed instructions for using Relay. -Stargate will deposit 2K in OP per week for voters of STG-USDC on Velodrome for a period of 5 weeks. -Stargate will receive a 10K OP GovNFT (worth $30K at current $OP prices) for locking more than 1M veVELO. This is a locked OP position vesting over 1 year that will allow Stargate to delegate and participate in OP governance. Stargate will claim VELO rewards on POL, lock them as veVELO, and deposit them into Relay every 4 weeks for a period of 52 weeks.