[RFC] Cross-chain emissions redistribution

This is currently a “temperature check”. Please comment and vote in the non-binding poll.


Background

Pickle is committed to a multi-chain, multi-layer (MCML) expansion strategy.

We are an Ethereum-native DAO and protocol, yet our community supports expansion to other chains, as can be evidenced in our Discord history as well as polls like this one. So far, we have deployed to Polygon, and are ready to deploy to Arbitrum and OKExChain (OEC) pending the closing of some business matters, one of which is emissions. Previously, cross-chain emissions were explicitly supported in PIP-36, which also lead to a temporary increase in PICKLEs/block from 0.1 to 0.3 until EOY. Currently, we provide 0.1 PICKLEs/block to Polygon, and keep 0.2 PICKLEs/block in the Ethereum mainnet, unchanged since PIP-36.

This RFC looks to generate consensus over the approach that should be taken to cross-chain emissions distribution in general, and in particular to the impending launch in Arbitrum and OKExChain and the implications for existing emissions to Polygon and the Ethereum mainnet. Lessons have been learnt since the defeat of PIP-43 where some voters felt the debate was rushed and were unsure if/when cross-chain emissions distribution would be revised (the answer is yes, they should be revised periodically). Moreover, the passing of PIP-45 has shown tremendous willingness by the DAO to let the Core team follow a strategic and dynamic approach to emissions distribution when it comes to pool 2s, a logic that could be extended to cross-chain emissions.

Proposals

We would like the community to give their inclination amongst the following approaches:

(A) Empower the Core Team to Decide on Cross-Chain Emissions Distribution

Similar to how PIP-45 was passed. One could make a split between mainnet and non-mainnet, as follows:

- Ethereum mainnet: 0.20 PICKLE/block
- non-mainnet/L2s/sidechains: 0.10 PICKLE/block

Under the oversight of the SCCOC, the Core team would administer the non-mainnet portion strategically. The portion sent to mainnet would be distributed according to the Gauge System already on mainnet. We would bring the non-mainnet TVL to the chains where it makes most sense, and to the farms where it makes most sense within those chains. All changes in distribution would be proposed to the SCCOC, which could then approve/veto them. All resolutions by the SCCOC would be of public record.

(B) Let the DAO Vote from a List of Proposed Distributions

This is similar to how PIP-36 was passed. For example one of the options on the final Proposal could be:

- Ethereum mainnet: 0.20 PICKLE/block
- Arbitrum: 0.05 PICKLE/block
- OKExChain: 0.025 PICKLE/block
- Polygon: 0.025 PICKLE/block

These would be revised monthly or sooner, with another vote by the DAO on Snapshot, and the cross-chain emissions distribution decided on would then be implemented by the Core team.

(C) Build the Gauge System so DILL Vote-Lockers can Decide Directly

The current Gauge System is not applied to non-mainnet farms, and the possibility of expanding it so it applies to non-mainnet farms has been alluded to in other discussions on the Forum. The Gauge System route would be the most technically complex, yet possibly the one that is both most decentralised and generates the most utility for PICKLE → DILL. As things stand, users would vote on mainnet for non-mainnet farms, and with a certain regularity, these changes would be applied cross-chain by the team. Having boosts in non-mainnet farms complicates things and may be unfeasible without a significant rewrite of the contracts and extensive use of secure cross-chain messaging protocols. Should the DAO heavily favour Proposal C, an interim resolution like Proposal A or Proposal B should ideally be decided on.

Vote

As this is a signal vote, we want to gauge where your interest lay and your arguments. We have included an “Other” option for you to make a case for a different distribution than the three suggestions above, or a different approach altogether.

How should PICKLE emissions be distributed cross-chain?
  • Proposal A
  • Proposal B
  • Proposal C, with Proposal A in the meantime
  • Proposal C, with Proposal B in the meantime
  • Proposal C, uncompromisingly
  • Other (suggest in comments)
  • Do Nothing (keep emissions as-is / launch on Arbi and OEC without PICKLE rewards)

0 voters

I like the sound of proposal C with A in the meantime - sounds like the ideal situation, although it does come with the potential of certain chain whales buying up pickles to lock for dill to incentivize use of their chain at the detriment of pickle. I initially voted for it, but this is an important vote and it is a bit too risky to assume rationality in the interest of pickle profits when it comes to chain distribution.

Yes, indeed. Under the current Gauge System architecture we cannot censor farms that have stopped making us money (for example rewards ended), which is of course, bad.

3 Likes

I’m a fan of Proposal A. While C sounds nice, we will find actors who prioritize their own profits over the protocol profits which hurts the protocol overall. I think Proposal A with the understanding that when the distributions change it is communicated to the DAO. The DAO knowing the distributions will allow us to set up a new RFC to express our concerns if we are not happy with the distribution. Proposal A will also allow for a lot of flexibility in case things are not working out the core team can quickly change the distributions as needed.

3 Likes

I feel like that Proposal A leads to unnecessary centralisation. Dill holders should have (at least up to a certain degree) the chance to have an influence on the emissions. If I commit capital to a chain I don’t won’t to find myself in the position that scocc changes the emissions spontaneously.

Great proposal, I have voted for Proposal C with proposal B in the meantime.

I want PICKLE token to be in demand. I want people to fight for emissions to go to their farms. I want to have CRV success story repeated for Pickle. I want other protocols to scoop and lock DILL to compete for emissions.

Right now, for many users, PICKLE is a farm and dump token.

I don’t think the whales will vote in a way that puts the Pickle protocol at a disadvantage. Why would you destroy the value of your holdings?

Wasn’t Polygon supposed to be the 1 Billion TVL driving chain? Haha… Anyways, C seems like the way to go with A in the interim. Assuming the SCCOC/core team will assess which sidechains are actually generating more money or losing the least.

The problem is still too much emissions…

How does this proposal work with the passed PIP-45? For proposal C with B in meantime, does this mean that Arbitrum’s 0.05 Pickle per block includes the Balancer pool 2? I think the DAO should consider opening with a bang on the new chains, making big headlines and then silently reducing rewards over time. Arbitrum should be opened with more than 0.05. Okex should open with more than 0.025. Putting this in the hands of DILL holders would increase utility of locked DILL and make everyone evious.

I already posted this in discord, I disagree with the proposed distributions, imo it makes no sense to incentivize mainnet so much. Mainnet is way too expensive, the capital is already locked in the contracts and only whales move their capital around, the recently added jars with the relatively low TVL kinda proove this point (the MIM/SPELL farms are the opposite, but they will move their main operations to arbitrum). ETH mainnet shouldn’t have a higher distribution than 0.1 pickle/block, the other chains get a distribution of the 0.1 pickles that are left other. If we lower the mainnet distributions we also get a lower distribution for the stable farms and we don’t subsidize these farms as much, a positive side effect.

1 Like

Pipicke, I’m with you on this. C is the way to go. Both B and A in the interim are appropriate. SCCOC is for human resources, not for economics. DILL should be the economics department. At the end of the year emissions are going down, unless the DILL department votes to keep emissions high. Alternatively, reduced emissions could be brought forwards after successful launches on other chains.
Wunderbend, what are your thoughts mainnet dipping to 0.1 while we temporarily increase emissions to new chains. Then over time, depending on the TVL and price of Pickle, global emissions get voted down.

Wunderbend, what are your thoughts mainnet dipping to 0.1 while we temporarily increase emissions to new chains. Then over time, depending on the TVL and price of Pickle, global emissions get voted down.

This is what I am proposing

I didn’t really like B just because I think Arbi is going to be another flash in the pan so to speak. A new and shiny thing will come along in a few months and CT/ crypto influencers will forget about Arbi so I don’t see the point in having more emissions there just for farming and dumping. Overall I still don’t think we’ll attract many more new people on L2s because they are bridging from Eth. If you don’t trust/like Pickle on Mainnet then you probably won’t like/trust us on sidechains regardless of how much cheaper the transactions are. Most likely current farmers will just move some of their Mainnet farms to sidechains but TVL will stay roughly the same. OkEx launch seemed interesting since it is its own environment but Dill whales killed that. Hopefully it still is profitable though.

The proposal PIP-45 likely to preceded this one. Meaning, it’s 85% of PICKLEs that go to rewards and out of those, they’ll get split either as A, B, or C. Until another PIP says otherwise, we are giving 15% of PICKLEs for liquidity incentives (DEX pools that include PICKLE).

1 Like

Currently gauge voting there are a lot of cases of whales voting for their own pockets and not the protocols profits see yearn wrapped stablecoin vaults. I think a barrier as well is having to vote on chain restricts who will vote and how often (cost of gas to send tx).

The reason for A and Not B is voting fatigue. Imagine every month arguing and voting on emission weights. With A you can still argue emission weights and getting enough attention we can argue and fix the emissions weight to what the DAO wants.

1 Like

I don’t see how we could argue emissions weights with Option A or that it necessarily means that we adapt them to what the DAO wants. Compared to the gauge voting on the Mainnet (and a similar voting system for non Mainnet emissions) I personally don’t feel like that with Option A I (as a dill holder) have any influence on future non-Mainnet emissions. Gauge voting was chosen as the way to decide on emissions and so it’s just logical to apply the same mechanism to the non-Mainnet.

1 Like

I like option A - The team has a solid track record being good stewards of the protocol. The multi-chain environment we are in currently changes quickly, it would be helpful to enable our dear full-time degens to manage that.

The DAO can provide the team guidance and principles via PIP / voting.
The team’s initial proposal is to use this ability as a bargaining chip to foster partnerships, pursue strategic TVL. That sounds fantastic to me.
If someone has a better idea for allocation than the team is currently implementing, we can provide feedback to them, or revote if needed.

Lastly, the team is not a few people acting unilaterally anymore. The addition of the SCOCC provides accountability and structure to the decision making process.

2 Likes

I voted for option A because:

B) I think a monthly vote would become a chore and participation rates would be low

C) This would be a major undertaking which would not only take significant time, but divert significant resources away from development that can drive revenues. If it were an easy fix then this would be ideal, but the benefits for me are outweighed by the opportunity costs of implementation.

3 Likes

Here is my ELI5:

Pickle inflation is 9m per year
Pickle collects 9m per year in fees

Not so long ago, ignoring CORN, Pickle used to have:
50% spent on rewards under control of DILL
less than 50% spent on salaries etc and surplus going to DILL-controlled Treasury where 1.4m got collected

Since then Core Team and SCCOC took control of the entire 50% with currently roughly no surplus going to Treasury (rightfully so, we need to expand)

Core team then took 6/40 (15%) of the 50% spend under DILL control to spend on Pool 2s, previously funded by Treasury which used to get the surplus (good call, let’s grab free BAL)

The Core Team controls Polygon emissions, but let’s ignore that for a moment. All this leaves 42.5% under DILL control.

Now the sentiment is to have 33% of Allocpoint going to ETH and the rest to other chains. If we pick A, and go for 33% ETH, 66% others, we will increase Core Team’s spending control from
57.5% Core Team - 42.5% DILL
to
86% Core Team - 14% DILL

But we are supposed to be a decentralized DAO!

There is true monetary value in allocating PICKLE emissions. Sell it to Alameda, and the votes will go to AVAX and SOL farming. Sell it to 3 Arrows Capital or Placeholder and it will be similar. Potentially destroying the Pickle protocol.

DILL holders are locked for 3-4 years. Core team is invested as well and there is overlap, but the current vesting is only around 6 months.

Polygon rewards have been left in the hands of the Core Team. Disproportionately large APYs were issued for Polygon farms while normal users were unable to access the UI because the instructions to use a custom RPC got removed from the website during farms/jars UI upgrade. This has been incidental and unintentional, but it happened. Large PICKLE emissions were supposed to get new users onboarded but the website walled off new users and only allowed in the type of liquidity that is sophisticated and least loyal.

I think DILL holders are better aligned to control emissions. Since currently PICKLE and DILL inflation is equal to 100% of the spending, they should have a say in how it’s spent.

Please don’t get me wrong, all governance decisions have been agreed through the DAO votes, the Core Team is doing an excellent job. The expanded influence of the Core Team is not a nefarious trend, it’s a natural drift. Overall, centralized organizations have large management benefits over decentralized ones. But we’re supposed to be a DAO. When SEC comes knocking, how do you explain to them that we’re truly decentralized when 86% of the spending is decided by the Core Team and SCCOC and DILL gets 14%? DILL is supposed to be a powerful governance token with everyone fighting and outbidding each other to get a piece of the sweet governance pie.

Chimaera - we know it’s tough and busy. The Core Team can deploy to other chains, build some farms and then pursue option C, maybe in a few months. “Let’s centralize because being decentralized is a chore” does not appeal to me.

3 Likes

I disagree, the current gauge voting is not always in line with the DAO or the Pickle token holders. As long as we have token voting or DILL, whales can easily game the system. They buy a lot of pickles, lock these for 4 years and boost a certain farm (yearn jars). The pickle token holders subsidize these farms at a pretty heavy loss. This doesn’t mean we shouldn’t support these farms, it is about building partnerships and trust in the ecosystem, but we certainly should limit the possibilities of the system to get played too hard. You can’t decentralize a DAO if whales farm way more pickles and get more voting power in return and they can easily pump their own farms.

Pickle is a protocol for everyone and not everyone is able to vote on gauge emissions (gas fees) or his/her vote doesn’t change a lot. If we give the SCCOC and the pickle team the power to control a portion of the emissions, they can keep the interests of the smaller users in mind and act accordingly.

2 Likes

“They buy a lot of pickles, lock these for 4 years and boost a certain farm (yearn jars).” - that’s literally how veTokens like vePICKLE or veCRV are supposed to be used. That’s the instruction on the tin. If Yearn jarns don’t earn enough in fees, you can add 0.5% entry or exit fee. Or advertise them to get more TVL. So far, Pickle protocol is fairly silent on Twitter about offering industry leading rates. Top farms should be advertised on Twitter every week to attract users and dilute the whales’ rewards. Pickle finance twitter with 22k followers keeps twitting about Polygon Galactic Grand Prix, AMA with someone unrelated and NFTs, but keeps 56.6% APY on stables, 118.3% APY on ETH-USD, 15% on ETH/stETH and 1600% ETH/DINO DeFi’s best kept secret. Tell everyone about these yields. Invite more whales, get them to lock DILL, don’t chase whales away. Make them fight for higher APY on their favorite farms.

“The pickle token holders subsidize these farms at a pretty heavy loss.” - that’s why they should have boosts and voting power over emissions. Otherwise pickle or dill holders sponsor a farm and dump scheme with a governance token that barely does anything. You shift emissions to other chains and there isn’t even any boost there.

“we certainly should limit the possibilities of the system to get played too hard” - veToken has been designed in a way that almost can’t be gamed, you increase emissions in one farm and anyone can use it. I don’t recall veCRV governance riding on the training wheels with CRV holders being babysitted by a centralized authority.

“You can’t decentralize a DAO if whales farm way more pickles and get more voting power in return and they can easily pump their own farms.” - nobody owns a farm, everyone can join. The instruction for a user to pump their favorite token farm is: stop dumping PICKLE, lock and vote. Advertise farms, get people to lock DILL, dilute the whales.

“Pickle is a protocol for everyone and not everyone is able to vote on gauge emissions (gas fees)” - you can vote once for 10-20 USD and keep your vote like that forever. The token design makes it a preferred option because if you voted every week, your share would get diluted over time.

“they can keep the interests of the smaller users in mind and act accordingly”. By smaller users do you mean farm-and-dump users that have no DILL?

1 Like