Proposal summary

The protocol treasury should acquire voting power in Balancer, Velodrome, and Thena, to facilitate yield generation, attract more liquidity and incentivize the borrowing of jFIATs.

Details

We have ±$215k of non-locked assets that generate yield and expose us to the price of some blue chips DeFi tokens but do not bring value to the protocol besides generating yield for the treasury.

More specifically, we have the following:

• $48K CVX
• $15K BUSD
• $2.6K MIMO
• $2K OP
• $1K ETH
• $67K MATIC
• $56K cvxCRV
• $24k jBRL-BRZ
• $1.7K jEUR

The treasury should sell all the CVX, MIMO, OP, and 40% of the CRV and MATIC, to purchase $100k of voting power as follow:

• $60K TETU
• $30K VELO
• $10K THE

Then, with the rest of the treasury, we should become an LP in these pools by either borrowing jFIATs or buying them, but this will be for another proposal.

Note: the treasury should transfer the assets to Jarvis LTD (0xc31249BA48763dF46388BA5C4E7565d62ed4801C) to speed up the process. Jarvis LTD will proceed to the swaps and send back the funds to the treasury on Polygon, Optimism, and BNB Chain. Jarvis LTD will provide all the tx details on Discord.

Motivation

JRT/JARVIS inflation near 0

The final goal is not relying on JRT/JARVIS inflation to pay a yield but acquiring voting power and using votes incentives (bribes).

• Voting power: locking the tokens mentioned above grants us voting power to allocate a portion of their emission to our pools, providing yield to LPs.
• Vote incentives: paying voters to vote for our pools, to receive more emissions.

If combined with POL and LP flywheels, acquiring voting power and using vote incentives reduce the JRT/JARVIS inflation.

• POL: Protocol Owned Liquidity, meaning that the protocol should own a portion of the liquidity in our pools (for ex, own jEUR-PAR LP token, jBRL-BRZ, etc.). If we own liquidity and vote for our pools, we will receive part of the token emission, which we can lock to gain more voting power.
• LP Flywheel: the LP flywheel consists of being an LP and buying the yield at a discount instead of passively receiving it. The idea is to deposit votes incentives, attract votes, and earn more in token emission. Transfero has been doing this for months on the 2brl pool on BNB Chain (deposit incentives and get more yield in token emission than their incentives). We have also been experimenting with it for a few weeks for JRT-BNB LPs on Ellipsis with a few community members. It helped grow the liquidity and yield for JRT-BNB LPs on BNB Chain and created some buying pressure for JRT there. Community members and the protocol (through POL) should participate in these flywheels. They would earn less yield (since they buy their yield), but this will positively impact the JRT/JARVIS price/liquidity/market cap. We will launch a flywheel incentives program to teach and incentivize the community.

Altogether, this would reduce the selling pressure on our token and can even incur buying pressure (like with the JRT-BNB flywheel). This could lead to token appreciation price and liquidity, allowing us to offer bond ala Olympus to accumulate more voting power and/or do more POL.

$60K of veTETU

Like Aura, Tetu is a convex-like project for Balancer: users give their BAL to Tetu in exchange for tetuBAL. The BAL acquired are forever locked in veBAL, and veTETU holders control the veBAL.

• $1 of veTETU controls $2 of veBAL. $60k of veTETU would redirect up to $37K of BAL emission annually.
• We propose buying only TETU instead of AURA and TETU, because Aura introduced a new rule that does not consider gauges that receive less than 0.2% of votes. To have at least 0.2% of the votes, we would need to acquire at least $60K of AURA, leaving no budget for buying TETU, and vlAURA is 50% less effective today than veTETU. We can always sell TETU in the future to buy AURA if Aura acquires more voting power than Tetu, but it seems for now that the acquisition of new veBAL by both Aura and Tetu is very low.

$20K of VELO

Velodrome is an improved fork of Solidly. It gained traction, potentially thanks to the Optimism hype and the OP they received from the Optimism foundation.

• When locking VELO, the Velodrome team distributes a bonus in OP that varies between 20 and 40% depending on the week (the more people lock, the less we receive). This essentially provides a 20 to 40% discount! So buying $30k of VELO could lead to receiving $6 - $12k of OP, which we can either use to buy more VELO and lock them (and receive a new bonus, and keep doing this every week) or use for bribes. This will require a new proposal. Nevertheless, depending on the bonus, it reduces the investment from $30K to $18 - $24K.
• $1 of VELO would redirect $0.9 of VELO emissions annually. Because of the bonus in OP, if we buy back more VELO, it would equal $1 of VELO would redirect $1.1 to $1.26 of VELO emission.
• The Velodrome team matches voting incentives with their OP token (they match 25% of each bribe), making bribes 25% more efficient.
• Because bribes are efficient on Velodorome ($1 = $1.5 - $3), the treasury should also become an LP and bribe and organize a flywheel on Velodorome with other LPs. This is why we propose limiting the investment to $20k and using more treasury to become an LP, as opposed to the Balancer ecosystem, where bribes are inefficient.

$10K of THE

Thena is a relatively new project. It is a fork of Velodrome on BNB Chain, but they have a roadmap that will differentiate them from Velodorome in the future.

• $1 of veTHE (locked THE) controls $3 of THE emission annually, which is more than 3x the emission ratio of veVELO. $10k of THE would allow redirecting up to $30k of THE to our pools. It could vary depending on the future price of THE and the dilution of our voting power. The lock is limited to 2 years.
• Thena is relatively new and could become an essential player in the BNB on-chain liquidity ecosystem thanks to their will to launch new pool models (uneven, boosted, etc.).
• Thena could follow the same path as Velodorome, so it is worth risking a position. But we propose limiting it to $10k because the Velodrome success may also be attributed to the Optimism hype and the OP they have received, as explained above. Therefore, it is not certain that Thena will follow the same path. Like on Velodrome, bribes are efficient ($1 = $2 - $5), so we propose using more of the treasury to launch a flywheel on Thena rather than acquiring more voting powers.

Selling treasury assets for the greater good

Selling assets such as CVX or CRV in a bear market at low prices may seem counterintuitive. But the plan is to use the treasury to optimize the protocol assets and use them only to add more value to it and, therefore, to our token. This proposal is the first part of a long-term plan to provide value to the upcoming JARVIS token, starting with near 0-inflation for yield generation.

Vote

YES, sell the treasury assets to acquire $60K of veTETU, $30K of veVELO and $10K of veTHE, and relock them weekly to maintain enough voting power. NO, do not engage in selling treasury assets to acquire voting power.