Author(s): @TigrisOfGaul

Summary

This proposal seeks to add protocol-held TAROT liquidity to Velodrome on Optimism and incentivize veVELO holders to vote for emissions to these TAROT-based pools.

Abstract

If adopted, Tarot will add up to 5,000,000 TAROT, along with a commensurate and proportional amount of USDC and/or other tokens, as liquidity to TAROT-based pools on Velodrome. Liquidity may be added in one or more stages.

This proposal also allocates up to 5,000 USDC in cumulative token value per epoch (i.e., 7-day period) to incentivize veVELO holders to vote for VELO emissions to TAROT-based pools on Velodrome.

For more information on Velodrome and the gauge voting mechanism for liquidity incentivization, see here:

• Velodrome Docs - Gauge Voting

Motivation

Tarot is committed to building on Optimism, and deep liquidity for TAROT will help to further Tarot's growth on the Optimism network. By significantly increasing the available liquidity for TAROT on Optimism, Tarot will have the flexibility to offer any number of direct or targeted incentivization models on Optimism for bootstrapping new lending pools.

Furthermore, TAROT-based pools may be co-incentivized by Velodrome, depending on the mechanism for liquidity incentivization (e.g., liquidity bribes, locking veVELO, or incentives for protocol-owned liquidity).

About Velodrome

Velodrome enables low-cost, near-zero slippage swaps on uncorrelated and highly correlated tokens. All trading fees and bribes in a Velodrome pool go to users who vote for the pool's corresponding gauge. Liquidity providers may stake LP tokens in a gauge to receive incentives in the form of VELO emissions.

Specification

The changes we propose authorize the protocol to allocate:

• Up to 5,000,000 TAROT, along with a commensurate and proportional amount of USDC and/or other tokens (from the protocol's treasury), towards liquidity on Velodrome
• Up to 5,000 USDC in cumulative token value per epoch (from the protocol's treasury) to liquidity incentivization on Velodrome