P14 - LM and Staking rewards budget and emission

INTRO

The treasury of the Jarvis Network currently holds around 90M JRT. I propose to set aside 30M JRT for a Reserve pool for providing liquidity, doing airdrops etc., and to distribute the remaining 60M JRT as staking and liquidity mining (LM) rewards, during at least 24 months and according to a flexible emission schedule revised every 3 months.

PROPOSAL SUMMARY

I propose the following:

1. Split the 89.7M JRT treasury into two pools: -Reserve pool: 29.7M JRT. -Growth pool: 60M JRT.

2. Use part of the reserve to provide liquidity by depositing $200k of JRT (around 2,870,000) and 50k USDC in a 80/20 Balancer v2 pool on Polygon.

3. Distribute the 60M JRT as following: 20M JRT for staking rewards and 40M JRT for LM rewards. The way these rewards will be distributed will be voted on other proposals.

4. The 20M JRT dedicated to the staking rewards will be distributed following an exponential-style curve with a 7.5% incremental step every month, starting with 321,001.59 JRT the first month.

5. The 40M JRT dedicated to the LM rewards will be distributed during the next 24 months; every 3 months, we will decide how much JRT should be distributed for the next 3 months.

6. The LM rewards budget allocation for the first 3 months will be 6.7M JRT

It is important to understand that this proposal only sets up the allocation and does not propose a way to distribute them. Eventually, there is no obligation to spend the entire budget allocation; unspent JRT could be added to the next allocation.

RATIONALE

About splitting the treasury: the Jarvis Network DAO should keep a certain amount of JRT in order to stake, provide liquidity, and organize strategic sales or swaps, while distributing the rest of the JRT as staking and LM rewards, or for airdrops and contests prizes.

About 80/20 Balancer pool: it has been discussed numerous times among the community, and the last consensus was to use the treasury funds to seed a $250k liquidity pool on Balancer. To get $50k USDC, I suggest reimbursing the Alchemix loan (22k) to get back 46k DAI, and add from the remaining USDC. A 80/20 pool is not the most efficient when it comes to slippage but it is the one providing the less impermanent loss for the treasury.

About the exponential curve distribution for staking rewards: I expect more JRT to be staked in the future, so starting with a slow distribution is the most logical. Starting at 321,001.59 JRT the first month, this amount will increase by 7.5% every month; the first year 5.9M JRT would be allocated for staking rewards.

About the LM budget: I suggest to follow an exponential then logarithmic curve distribution and for the first 3 months to allocate 6.7M JRT. This will be enough to cover the LM with Kyber on Polygon for our jFIAT, and additional programs like single-asset pools or for the JRT liquidity.

In all cases, the treasury will need to buy back the JRT distributed to compensate for the inflation and to refill its reserve.

VOTE

YES: in favour of all these propositions. 50k USDC will be gathered and sent to Polygon to fund a 80/20 liquidity pool on Balancer v2; 321,001.52 JRT will be added to the stJRT contract and the stJRT; 6.7M JRT will be allocated for covering all the LM programs for the next 3 month.

NO.