Monthly community call - feedback, comments, suggestions

Really pleased that there was a recording, thanks.
Here are my feedback, comments, suggestions.

First of all, what’s missing from the call:

SCCOC took control over the emissions on other chains. With control, comes responsibility. What is the policy for emissions of Arbi, Poly, Okex? What are the objectives and how are we going to achieve them? So far, SCCOC took control and did nothing to improve the situation on Polygon where rewards are excessive.

Since the plan for DILL to snapshot vote and boost on these chains is on freeze, should Pickle emissions in excess of 20% apy on these chains be on freeze as well?

What are the considered policy options for emissions on these chains?

Plan for DILL voting and boosts is on freeze. Is it on freeze due to lack of dev time? If so, what is the realistic ETA date for DILL holders to be excited about? Mid 2022?

What do devs think about DILL voting and boosts on other chains? Is it possible? Is it likely? Is it easy?
Should we abandon this idea and go to the drawing board with other ideas?

Comments about GREEN

The way GREEN is presented is overly optimistic:

It assumes that GREEN generates fees and people are keen to own GREEN - people will only hold GREEN if holding it comes with 10-15% APY. It is probably implied that DILL holders will sponsor it, but I’m pretty convinced that DILL holders don’t want to sponsor an initiative so far outside of Pickle’s expertise.

MIM is only popular because it pays holders at least 10% APY for holding it. MIM has backing of key DeFi figures and deep integration with DeFi. Pickle has no VC/key figure backing. Pickle is not even in the DPI index and protocols refuse to take pTokens as collateral. MIM bootstrapping is a one in a year/decade event of creating a stable with dodgy backing, carefully planned and executed - not a fluke. For Pickle to pull off something similar, we’d have to have full backing of VC and wallets with billions committed to bootstrapping it. We don’t have that.

The discussion is positive about LQTY design while it’s a failed product. LQTY has neat mechanics, but does not pay people to hold LUSD, this is why it has failed and is not widely adopted.

MKR’s DAI design generates almost 0 fees because MKR uses pristine collateral. MKR does not have to pay for holding DAI because other protocols have integrated DAI, and MKR holders are the backstop. The realistic likelihood of widespread GREEN adoption is very very low.

LQTY has complex maths. Adding multiple collaterals with massive oracle problems and collateral difficult to liquidate is like designing a new super complex protocol from the scratch. I think LQTY design needs to be shelved. Unit Protocol could be considered as the potential protocol to borrow the design from. But the main problem remains - who will hold GREEN and who will pay for holding GREEN?

I’d zoom out and look at objectives. Objective - to leverage up the pTokens.
Key primitive:
Alice has pTokens and wants to pay 10% APY USD loan backed by her pTokens
Bob has USD, wants to get 10% APY on USD in exchange for risk associated with owning pToken collateral.

Saying that Alice will pay 10% APY to get a loan and Bob will hold GREEN for free is a massive omission.

If we stay zoomed out, and aim to simplify things, let’s try to get rid of complex dynamics.
Alice pays 10% APY for USD borrow.
Pickle finance could be the Bob. Pickle finance holds USD in treasury, instead of holding it in stable farms, it could be used to bootstrap the mechanics of leveraging up the pTokens.

Let’s simplify as much as we can.

Alice brings pTokens and wants USD at 10% APY
Pickle protocol takes her pTokens and gives her treasury USD at 10% APY.

We have just added more utility to the pTokens. Great for the protocol.

Now how to make it simple and safe?
Again, I’ll advocate for optionality.

Every week on a Sunday at burger and europe suitable time, there will be a borrowing window. Similar to COWswap happy hours.
At that point in time, a team member will make offers for USDC loans issued against your pTokens: ALCX-ETH, SPELL-ETH on Pickle website.
He will mark to market the pTokens and allow users to get:
30% USD value of the ALCX-ETH and SPELL-ETH for 4 months at 15% APY
numbers can be adjusted, more pTokens can be added.

Users will have an option to:
1 return USDC minus 15% APY permissionlessly on Pickle website at any point in time and get pTokens back
2 never come back, keep USDC, after 4 months the offer to return USDC and get pTokens back expires

The role of the human will be to

  • 100% accurately mark to market (human oracle),
  • respect max caps for borrow.

Pickle protocol will take risk of ALCX-ETH and SPELL-ETH crashing dramatically within 4 months. We’ll buy a put. For owning that put we’ll earn 15% APY and we’ll boostrap an options trading network.

If this takes off, we could add an option that on Sundays other users, not only Pickle team can offer loans.

With time, as this matures, we could build an oracle and have loans(options) available 24/7.
The option initiation fee could be 0.5% or no fee at all. Or 0.2%.

We don’t seem to have efforts aiming at general public that struggles with Metamask. Our UI is complex. We could pay zapper for 1 click deposits and withdrawals.

I find it very satisfying to mock the DPI garbage on discord. It’s total rubbish, yet people invest in that.
We should make a Pickle degen index fund.
People deposit whatever coins, and these coins get traded by a human to a degen index of pTokens.

Sample composition:

The index is managed over time either by:
-Pickle team or
-Special pickle taskforce
-Snapshot vote of holders to the hardcoded limits like at least 4 assets in the fund and min 15% allocation

Pickle treasury could invest the first 100k to bootstrap and get food for mocking other indices. Comparing 100% APY pToken index with DPI will be hilarious, especially if we do that with 100% conviction and pickle treasury accepts twitter bets of anyone showing any doubt in our index. Your typical Joe will just deposit whatever token and our index manager will deposit that into the index. pTokens will not be staked in farms. No fees are needed. Imagine the 0 fee headline.

“We take 0 fees for an index that outperforms DPI by 200% yearly, we accept bets against our index, look how we’re outperforming the DPI garbage EVERY SINGLE FLIPPING DAY!”

Over time, the Pickle degen index token could be widely traded, get a price and become collateral for borrow allowing to leverage up.