Utilize unclaimed tokens on Velodrome to increase Stargate's weekly earnings and qualify for govNFT

Background

Stargate is in a unique position to extend its initial program on Velodrome at zero cost to the protocol by redeploying unclaimed liquidity rewards and veVELO voting rewards. Deploying these rewards strategically can allow Stargate to generate up to ~$15K in profit per week, as well as receive a on-time Velodrome partner bonus of 10K OP tokens (~$40K at current valuation) vested over 1 year. 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. Currently, protocols direct an average of $2-$3 in VELO emissions for every $1 of voter incentives, equivalent to a 1.1X-2.5X multiplier. Stargate is uniquely positioned to benefit from this incentive multiplier, as the protocol can capture a large share of VELO emissions through POL and rewards through veVELO votes. Stargate has accumulated ~1.5M VELO in LP rewards and ~$60K in veVELO rewards (mainly STG, USDC, and OP) from its veVELO position, which Stargate can deploy to boost STG liquidity while continuing to accrue rewards at no additional cost, as follows: Lock the VELO rewards to increase its Protocol Owned Votepower position to ~9M veVELO Deposit the veVELO into Relay (Velodrome's automated voting system) Deploy $6K in weekly incentives for the STG-USDC pool per week on Velodrome over a period of 10 weeks, using the veVELO rewards to be claimed. Maintain current staked POL on Velodrome. Claim VELO rewards, lock as veVELO and deposit into Relay every 4 weeks for a period of 52 weeks. Combined, these steps will boost Stargate's liquidity and voting rewards. The 1.5M veVELO will allow Stargate to direct ~$1.2K in weekly emissions to the STG-USDC pool. And at a 16% APR, Stargate will earn an estimated $15K per week on its $5M POL (staked on Velodrome and Yearn). Through Relay, Stargate's veVELO position will automatically vote for STG-USDC each week and compound rewards into more veVELO to increase the protocol-owned votes for the pool. Tour de OP Program Velodrome is also currently offering 12K OP in additional weekly incentives to protocols participating in the flywheel. Stargate's pool would automatically qualify to receive a share of these rewards, potentially representing a 15-20% boost to Stargate's program. Velodrome Relay Relay is an automated veVELO manager, which can vote, claim rewards and compound veVELO on behalf of Stargate. This will significantly improve the experience of Stargate operations on Velodrome by removing the need to execute veVELO related transactions. 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 voting rewards and liquidity rewards on Velodrome.

Stargate will lock the claimed VELO portion as veVELO.

Stargate will allocate the rest of the claimed rewards (e.g., STG, OP, USDC) as incentives to STG-USDC for a 10-week period, depositing 1/10th each week.

Stargate will 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 receive a 10K OP GovNFT (worth $40K 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.