UP-5: Adjusting LP Rewards Distribution

Author(s)

• nir.eth
• vern

Glossary

• Yup Treasury = The treasury of the Yup DAO, managed at treasury.yup.eth
• Curator/Creator Rewards = rewards earned by curators and creators collectively (currently set at 50% of daily emissions)
• LP Rewards = rewards earned by liquidity providers for staking liquidity to the YUP/ETH LP pool on Uniswap and Quickswap

Summary

This proposal is intended for the community to achieve consensus on a change in the distribution of rewards, mainly away from liquidity providers and towards curators/DAO. Below are a few choices of different divisions of rewards for voters to rank.

Rationale

• Liquidity incentives are too high and not as necessary at this point.
• More curator/creator rewards mean more valuable content surfacing on the protocol.
• Encourage contribution and involvement.

Effect

• Fewer rewards for liquidity providers will push users to stake less and participate more, presumably reducing total liquidity but increasing protocol activity.
• Higher real circulating token supply

Specifications

• Current Reward Distribution:
  • 50% to Curators and Creators
  • 23% to Liquidity Providers
  • 22% to Team
  • 5% to the DAO’s Treasury

Communication

• Discussion: https://forum.yup.io/t/solving-lp-rewards-issue/244/14
• Discord: https://discord.gg/vz2XDT2W5B

Quorum and Governance Notes

Minimum Quorum: More than 10% of circulating, non-treasury YUP must participate for a proposal to pass.

Ranked-choice voting

We'll be using Ranked-choice voting for this proposal. Each voter may select and rank any number of choices. Results are calculated by the instant-runoff counting method, meaning if your first choice isn't supported, your second will be your vote, and so on. More here.

Proposal

How should rewards be distributed between Liquidity Providers, Curators/Creators (C/C), and the DAO Treasury?