[RFC] Curve Vote-locking Proposal

Note: This is a Request for Comments (RFC) proposal.

Authors:

@Larry_Cucumber @BigBrainBriner @0xpenguin (the core devs) with the help of @yyctrader

Abstract:

We propose using $242k worth of treasury funds for purchasing and vote-locking CRV to participate in Curve DAO governance. This will be used to boost pJar 0c (Curve 3Pool) rewards by a rate of approximately 1.5x.

Note that these are preliminary discussions that can only be acted on once we receive whitelist approval from Curve Finance.

Motivation:

As part of our ongoing efforts to offer a diverse set of PickleJars, Curve has provided us with some exciting possibilities. Given the potential end to UNI rewards, it would be in Pickle Finance’s best interests to proactively explore options for retaining and attracting new TVL. Making a large commitment to vote-locking on Curve Finance presents an opportunity for significantly increasing the TVL for Pickle Finance and also presents an opportunity for deeper involvement with one of our closest liquidity mining partners.

Intro:

For those who are unfamiliar with Curve Finance’s vote-locking system, Curve allows CRV holders to lock their tokens to gain voting power in their DAO and to increase (or “boost”) their CRV rewards by up to 2.5x. Individuals are free to lock up CRV at any point. However, smart contract addresses (such as Pickle’s) require whitelist approval from Curve Finance before CRV can be locked.

We are seeking the community’s input on Pickle Finance’s strategy for approaching our relationship with Curve Finance. Specifically, two key questions are outstanding:

  1. If/how we should allocate treasury funds towards funding CRV vote-locking?
  2. If/when Pickle Finance is whitelisted, how should we participate in the governance of Curve Finance?

Background:

Curve Finance has suggested that a key step in obtaining whitelist approval is for our strategy smart contracts to be audited.

Pickle’s Curve Strategy for pJar 0 (for the Curve sUSD pool) has been successfully audited by MixBytes. Following this, the Pickle Finance team has been in discussions with the Curve Finance team, which has led to this active discussion on Curve’s governance forums.

Curve Finance currently has an active signal poll on whether Pickle should be whitelisted: https://signal.curve.fi/#/curve/proposal/QmYFez5VVPT2hBscmDk6bciLifhZKX9rsCW8VK8rcmMZuD.

Proposed Solution:

We propose buying and vote-locking approximately 550,000 CRV (~$242k) using treasury funds and using the locked CRV to boost pJar 0c 3Pool yields.

This would produce an immediate 1.5x boost for Pickle Finance’s 3Pool (pJar 0c) yields. Thereafter, we propose diverting 25% of CRV rewards to be locked with the end goal of obtaining the maximum boost (up to 2.5x). In this scenario, the maximum boost would be obtained in approximately 19 weeks. This will also result in an immediate 12.5% increase in CRV rewards for pJar 0c.

For reference, $242k makes up about 45% of the Pickle Finance treasury (at the time of writing).

This approach will produce immediate benefits to Pickle Finance overall, and not just to pJar 0c participants. If all goes according to plan, pJar 0c will be a very attractive option for anyone looking for a place to deposit their stablecoins with the promise of ever increasing returns (through the build-up of locked CRV). Pickle Finance’s upcoming Jar swap feature will allow participants to continuously earn yield while having the option of exploring different assets (e.g. ETH or BTC), thus encouraging long-term TVL for the protocol.

Assumptions:

Following are the assumptions relied on for reaching the above conclusions:

  • The liquidity in Curve sUSD Jar (pJar 0a) will migrate to the Curve 3Pool Jar (pJar 0c). The upcoming Jar swaps will make this a painless process.
  • 3Pool is prioritized for the time being for having the highest gauge weights. This is subject to change in the future by the Curve DAO.
  • In order to minimize upfront costs, CRV would be locked for the longest duration (4 years). Funds released at the end of the lock-up will be returned to the Pickle Finance treasury.
  • The price of CRV is assumed to be $0.44, even though the price at the time of writing is $0.36.

Other Options Considered:

A number of other options were considered. Ultimately, we found that the proposed solution provides the largest impact in attracting future TVL while being conscious of the state of the treasury.

  1. Not paying for any vote-locking upfront
    • In this scenario, in order to benefit from boosted rewards from locked CRV, Pickle Finance would have to divert a portion of profits from the Curve pools (likely somewhere in the range of 10%) to build up the boost rate.
    • This is unsatisfactory as current participants will experience a decrease in yield and will be paying for future participants’ gains. In addition, it will take too long to yield sufficient results (~42 weeks to reach a 1.5x boost assuming 10% of rewards are locked).
  2. Paying for a smaller boost
    • The option of paying ~$100k for about an initial 1.21x boost was considered.
    • In this scenario, Pickle Finance would be able to divert a maximum of 17% of CRV rewards to be locked-up without decreasing existing yields in the Jars.
    • Without demonstrating an immediate increase in yield and by only gradually increasing the reward rate, the benefits sought in getting whitelisted to attract more TVL are at risk of never being realized.

Curve Governance:

If Pickle Finance is whitelisted by Curve and this proposal passes such that we will have invested significant resources into the Curve protocol (almost half of Pickle Finance’s community treasury), Pickle Finance will have a vested interest in the continued success of Curve Finance. With the voting power derived from locked CRV, Pickle Finance has an opportunity to meaningfully participate in the Curve DAO.

We will form a working group specifically tasked with discussing and deciding on how to vote on different Curve proposals. This is necessary for strengthening the synergies between the two protocols. Whenever there is a proposal which is of significant interest to the broader Pickle Finance community, the working group will consult the community, and where appropriate, put the Curve proposal to an official governance vote.

The working group will comprise at least one member of the multi-sig key holders who will be tasked with casting the vote on Curve proposals on behalf of Pickle Finance.

Closing:

An important caveat is that whitelisting by Curve is by no means a foregone conclusion (to date, only Yearn has been whitelisted). However, by deeply considering these issues and by having community buy-in, we can present a strong argument as to how and why Pickle Finance will be a strong yield farming partner to Curve Finance. Your comments on this proposal and where you may see room for improvement are welcomed.

Lastly, while BTC remains an important part of the Pickle ecosystem, we feel that it is best to focus our limited resources on the stablecoin Jars to begin with. Consequently, users of our Curve renBTC pool (pJar 0d) will not be asked to contribute to any CRV withholding at this time. This can be addressed in a future proposal if the community wishes.

10 Likes

Few questions and points:

  • If we lock for 4 years, we’re going to earn 3Pool tokens from locked crv (https://www.curve.fi/usecrv), what happens with that? IMO it should go back to pickle holders by buying back and returning pickles as the funds are coming from the treasury but they only directly help jar joiners not pickle holders (excluding the fees we take)

  • This will change the 3pool jar yield from like 10% to like 15%, is that 5% going to make a difference when the majority of value from our competitors (farm) is coming from their token emissions so their yield is higher than 15%. In the short term probably not, but maybe in the long term?

  • CRV is getting cheaper daily because of their emissions, do we want to go all in now or should we say spread the buy over 10 weeks and buy some each week?

  • What’s the tradeoff of spending our money here? Would hiring another full time eng at $250k/y salary move us forward faster?

  • Right now we’re assuming uni farming ends, but its possible uni does continue or adds more uni pools

  • How much dev time will this take? Is removing withdraw fees, and using the performance fee to buy pickles higher pri?

3 Likes

Some good questions from @famousamos

Couple of quick Qs from me:

  • Have you modelled scenarios which show how long it would take to replenish the treasury with this amount from pJar 0? eg how much TLV we might attract, what 75% rewards x Profit % looks like, etc
  • To maximise appeal of the intial APY, could we model a scenario where the x% of rewards scales up linearly as the boost increases and optimise the ratios?
    Eg week 1 has x% of rewards redirected and locked which leads to y% boost which creates z% APY. By modelling a desired z figure over the 20 weeks, x could be adjusted accordingly? If I am looking at this the right way.

I think the Governance question would almost be best left as a separate discussion - if we have 550k veCRV and increasing, we’d have a significant say in CRV proposals looking at past votes (not many single holders with more than this have voted before).

2 Likes

I’m obviously on board, hence all my posts on curve’s sCIP#5 vote. lol

4 Likes

I’ll try to address each of your points in turn:

  • If we lock for 4 years, what happenes with the funds that are earned from veCRV?

    • Since the locked CRV is proposed to be purchased using a combination of the Treasury AND the profits from the 3pool pJar, the rewards, when they do come online, should follow a pro-rata schedule to reward both sources for their contributions. The project will benefit from having more funds directed to the Treasury.
  • Will the increase in yield make a difference vis-a-vis our competitors?

    • The boosted rewards will be in the form of increased stablecoin capital, which is much “safer” than being rewarded in their native token. We should highlight this distinction more clearly. We can also deploy PICKLE emissions in a similar fashion.
  • CRV getting cheaper

    • There is an opportunity cost in waiting. Holding CRV price, APY, and TVL constant, if we buy over 10 weeks instead of all in week 1, we would earn $617,000 in interest as opposed to $762,000 in interest. Also, I don’t feel like we should speculate on CRV as we want to be active participants in the Curve DAO should this proposal pass.
  • Spending the money on hiring extra engineering resources instead

    • As Banteg says here, there is a massive undersupply of engineering talent that’s available to take on work in this space. We definitely want to do this as the project grows, but we have to ease into it and find the right fit/contributor more organically.
  • UNI farming might continue

    • Regardless of the UNI farming program, our involvement with Curve should be considered a long term investment by Pickle Finance. In my opinion, Curve has stood the test of time and will continue to provide exciting yield farming opportunities.
  • Dev time

    • The technical implementation of all of this is not overly difficult. The issue of fees is one that we’re going to discuss.
4 Likes

Now on to your questions @chimaera :slightly_smiling_face:

  • How long to replenish treasury
    • It’s hard to precisely calculate how long it’ll take to replenish the treasury because the current fee-model depends on withdrawal fees from people leaving, which is indeterminate. For reference, the treasury received $319k in withdrawal fees over 3 weeks.
    • It’s also hard to predict how much TVL we might attract. But it can be reasonably assumed that it will be very attractive for fresh capital to join when we’ve achieved a high level of boost.
  • Model where rewards scale as boost increases
    • What you propose is quite interesting. Although I think it could work in theory, there’s a lot of variables that are hard to bake in to the model such as CRV price, 3pool gauge weights, the growing number of deposited veCRV, etc… It would take a huge engineering effort to do this properly such that I think it would outweigh the benefits.

You’re right that there are a lot of additional points to flesh out regarding how we structure the governance side of things.

4 Likes

Really exciting, I love the idea of the treasury ‘investing’ in other DAOs and being active in the governance. We benefit from boosts, and they should benefit because it will be in our interests as stakeholders in their project. I LOVE IT. Hopefully the first of many.

Well done to everyone who worked on this proposal @yyctrader!!!

5 Likes

Thanks for the responses, Larry.

I’m almost totally ignorant to the feasibility or time involved in such things so always happy to have this factor overrule any ideas :sweat_smile:

1 Like

I’m not sure that my idea is relevant or even applicable but I give it to you anyway ^^

I have been using the Curve platform since July, so I received CRVs from the cash I brought and the bonus to be recognized as an early investor.
I have placed stablecoins in different pools, some are locked, some are not (my 3Pools token are in PICKLE).

I am not a big investor (<$ 2,000) and therefore pay close attention to the costs necessary to optimize my strategies (gas price for each intervention). The fees are particularly high on Curve compared to the capital / income generated. For this reason I have chosen not to lock all of my CRVs and therefore not to take advantage of the Boost opportunity.

I would like a solution so that I can delegate my CRVs while benefiting from the dynamics of Boost, and allowing me to minimize the impact of transaction fees.

I will be delighted to delegate my CRVs to PICKLE as part of the project concerning the Boost of the interests of the 3Pool jar:

  • this will reduce the use of the treasury, the funds could be redirected in new strategy, and / or complementary to my participation to maximize the boost in a minimum of time (example 1CRV of me: 1CRV of treasury)
  • I will benefit indirectly from the Boost without having to worry about transaction fees
  • I confirm my participation in the Curve platform as a supporter
  • I actively demonstrate my support for the PICKLE protocol

My delegated CRVs would be locked for 4 years, supporting my commitment to the 2 platforms (Curve and PICKLE)

If it were possible to delegate its CRVs:

  • Would it be relevant to have the choice to participate in the Boost if I had the possibility of “co-financing” it?
  • Would it be inappropriate to limit access to Boost to those who lend their CRV?
  • Is it too complicated to implement?

The total of 550,000 CRV seems to me easily attainable if it were to be supported by only those interested in the Boost of ps3Pool, this amount could even be exceeded and / or supplemented by the treasury to reach x2.5.
The minimum amount of delegated CRVs would be what is needed for maximum Boost (15.5 3Pool token / VeCRV at the time of writing).

For example:

  • I have 1000 3Pool token in pJar 0c and I want to participate in the Boost, for this I should delegate (1000 / 15.5 =) 64.5 CRV (24.2$) for 4 years to benefit from the Boost x2.5
  • I have 1000 3Pool token in pJar 0c and I want to participate in the Boost, for that I would have to delegate (1000 / 15.5 / 2 =) 32.26 CRV (12.1$) for 4 years, the other half (32.25 CRV) necessary to benefit from the Boost x2.5 would be provided by the treasury.

I will be happy to hear your opinion

1 Like

Thanks for sharing that idea. Unfortunately, I think there are a couple wrinkles in this implementation that make it difficult for this it be a reality. If people were required to contribute CRV for funding the boost upfront, it would be unfair for others to come along and enjoy a higher level of boost based on others’ personal contributions (from contributing to the initial boost). If people in the future were required to contribute a proportional share of CRV as those initially helping fund the boost, it would create a very high barrier of entry for those who wanted to share in our 3Pool Jar’s benefits (they would have to obtain CRV first, lock it up, etc). And this is further complicated by the fact that you can’t delegate veCRV to others (to my knowledge), such that you won’t receive it back if/when you decide to exit.

I appreciate you showing your support for both Pickle and Curve. But ultimately, I feel this should be a treasury expense that all future participants can enjoy the benefits of, with no barrier to entry. This is what will help drive fresh TVL for our project :slight_smile:

2 Likes

Greetings, fellow Picklers!

First off, let me say that it was a pleasure working with @Larry_Cucumber and the team to develop this proposal.
I hope the community will indulge me, as this post is probably going to be longer than OP.

It’s been a long time since I’ve been this excited about a project and I’d like to contribute what my life experience has taught me.

I truly believe that we have a chance to create something special here at Pickle.
That being said, we’re at an inflection point where the decisions made in the next 2 weeks could very well decide our fate as a project.
The goal of creating a DAO-based hedge fund is an ambitious one to be sure, and the journey will undoubtedly be bumpy, but I’m convinced that we have the ingredients to succeed.
We just need to tweak the recipe a little…

In my humble opinion, DeFi has the potential to cause severe disruption in the asset management industry for one simple, yet essential reason : Ease of raising capital.
As anyone who has raised/managed external capital will tell you, it is one of the must frustrating and thankless jobs out there. People are more willing to sign over their souls than their money.
I used to manage a small fund a few years ago. Nothing big, mind you, as we started with $2M from family and friends and eventually built up our AUM to $15M over 3 years.
I can still remember how hard it was to raise each and every dollar of that capital - constantly following up, wining and dining, having to convince spouses in some cases, and the list goes on.

Enter DeFi, where the best traders and strategists can raise hundreds of millions in days (or hours for that matter) - without roadshows, gladhanding and regulatory hurdles (though I’m sure those will come in time)
Yield farming may be a fad or it may not, but the platform to raise capital will remain. Projects that can envision this future and plan for it are going to be the ones that will thrive in the long term.

Now, couple this with projects like Synthetix, UMA, Barnbridge etc. These guys are all working on bridges between DeFi and traditional finance.
What this means is that one day soon, we will be able to trade derivative versions of stocks and bonds through DeFi. Futures, options, bonds, you name it.
It’s already happening: UMA’s Synthetic Token Builder allows you to track the price of ‘anything’

I’m going to repeat myself here so that it sinks in: We will be able to buy virtual Apple shares though DeFi; no bank, no broker, no custodian -> ours keys, our crypto

When enough liquidity enters this space, it’s going to trigger a seismic shift in the industry because the best traders will no longer be constrained by ‘the system’.
The best and brightest will be rushing to establish their own decentralized funds because they will get to keep a much larger piece of the profits than they would at an institution.
Their clients will follow them because they value performance above all else, and the safety of the system will have been well established by then.
Most importantly, regular retail investors will finally be able to access the talent that has been reserved for ‘accredited investors’.
$10B locked in DeFi is less than nothing when compared to the trillions of dollars looking for yield in this ZIRP world.

So that’s the big picture. Moving on to Pickle…

Any asset management unit depends on 3 pillars to thrive : Trust, Capital and Performance.

Right now, Pickle has the trust of the community, and a dev team that has proven deserving of it, based on their professionalism and quality of execution.
As validation of that trust, we have $125M in the Jars and 34% of Pickles currently staked.
But trust only goes so far, and though it might not seem like it, I believe the next 2 weeks are going to be pivotal.

We’re also fortunate enough to have adequate liquidity, but money is fickle and we can’t afford to assume that it will continue to be the case.
IMO the only reason we continue to have this liquidity is because we have been directing the majority of PICKLE rewards to the ETH/Pickle pool.

Why the urgency? Uniswap mining will look very different in a month’s time and we don’t have enough information yet to see what the landscape will look like.

That’s 70% of our TVL that’s potentially going to be looking for a new home in 3 weeks, and if we don’t have an attractive option ready to accept funds, we’re going to be left standing with our proverbial pickles in our hands.

So, now is the time for bold and decisive action.

Question 1: Has the vision for Pickle changed?

Let’s rewind a little to see how far Pickle has come in such a short time. Since I wasn’t around for the first week, please feel free to point out any inconsistencies.

Pickle was envisioned as an experimental protocol in keeping stablecoins pegged. On-peg, good. Off-peg, bad.
A novel initiative, and one that was sorely needed at the time, since DAI especially kept moving off its peg.
All good so far…the mission, objective, and messaging are all in alignment -> hype + good market response

Along comes big papa Uniswap, who announces UNI liquidity mining.
The team is perceptive enough to recognize the opportunity, and race against time to roll out PickleJars to coincide with the UNI launch.
UNI launches and boom, suddenly we have huge TVL and Pickle goes through the roof. Even better!
At this point, the messaging isn’t really in line with the mission, but nobody cares because it’s moon time…
This is not a shortcoming imo, lest we forget that it’s just 4 people on the core team and they’re suddenly managing hundreds of millions of dollars? It’s a lot of pressure.
The fact that the team managed to pivot in time to capture the opportunity is exactly what a capable hedge fund needs: agility.

September 29 - we find ourselves in a pickle…an inadvertent error throws a wrench in the works. Trial by Fire.
This, right here, could have broken a lot of projects/teams.
However, the team manages to fix the problem post-haste, all while having to deal with a very angry Discord (what a night that was).
I’ve said it before; the professionalism exhibited in crisis is what earned my trust (and I’m usually very cynical).

Since then, we’ve launched new Jars and Farms for 3pool, renBTC and WBTC/ETH + the new DAI strategy. All positive steps.

Yet, the price of PICKLE is languishing. Why? This is a question that many in the Discord have been trying to answer.
To me, the answer is simple.
The market:
a. doesn’t know what we’re doing (marketing problem)
b. doesn’t understand where Pickle is headed (roadmap/vision problem)

Contrast this with FARM. They might be meme-y and ponzi-like, but they make no secret of it.
The market knows exactly what its getting, and money always chases money.
The smart money will have bailed long before the house of cards tumbles, and the cycle will continue as it always has.

That concludes the history lesson. On to the present…

Question 2: Where do we place our bets with the highest odds of success?

If we’re going to build stable, growing AUM/TVL, we have to focus our efforts on the base layer of crypto liquidity, ie. Stablecoins, BTC and ETH.
That’s the bridge to ‘real world’ money. If you believe, like I do, that we’re only in the 1st inning of DeFi and that mass adoption is coming, we must position Pickle to be a leader in that space.
Additionally, we must focus on attracting what we used to call ‘dead money’. This is not dumb money that FOMOs into the farm of the week. Nor is it the smart money that constantly seeks to maximise yield.
We’re talking about money that does its research and finds a good investment provider that offers safety, simplicity and liquidity. As long as returns are above their ‘acceptable’ threshold, they stay put.

These investors look for a fire-and-forget solution, ideally one that they can check in on every month/quarter, just to confirm that what was promised is being delivered.

I believe the future of Pickle lies in single asset pJars, with a simple, idiot-proof interface.

Users deposit their choice of asset in one click (one transaction) and the pJar does the rest behind the scenes:

  1. Deposit stablecoins into 3pool
  2. Deposit 3pool LPs in pJar
  3. Stake pJar tokens in corresponding farm

We develop a simple dashboard with just 4 datapoints: Deposited amount in original currency + US$, Current balance in original currency + US$, Pending Pickle Balance + US$, Current APY.
And just 3 buttons : Deposit, Withdraw, Harvest

The single-asset DAI strategy is a great start, but not many folks use DAI (it’s more a super user thing).
While the more complex strategies are undoubtedly ‘cooler’, the majority of investors prefer the simplest solution for a given yield.

I’ve been advocating for 3pool and its boost for this exact reason, as we can build a simple solution around it.
It also has at least a tangential connection to the original off-peg/on-peg mission as moving large volumes of stablecoins into and out of the pools will influence prices due to the deposit/withdrawal bonus incentives.
We start with 3pool and its 330M in stablecoin liquidity.
Next, renBTC with its 340M in BTC liquidity.
Finally, a single-asset ETH strategy if and when we can identify a suitable source of yield.

Question 3: How do we Execute?

For the next 2 weeks, we focus all our efforts on getting whitelisted.

In my mind, we should be ready to announce a new PickleJar the moment we are whitelisted.
Our launch tweet could look something like this:

Market jitters? Need a safe place to park your stablecoins?
Pickle Finance has you covered!
Audited by MixBytes and Haechi, whitelisted by Curve Finance,
Presenting PickleJar X, bringing simplicity to DeFi!
Deposit your stablecoin of choice in just 1 click to earn 20% APR without risking your principal!
Insert pplpleasr video here

In order to get to that launch point, we have a long list of things to do and less than 2 weeks to do it. (If the Curve governance vote takes another week after Signal)
We have to get our roadmap, mission, and messaging in alignment again:

  1. All this is moot if we can’t get whitelisted, so we mobilize the community…post the link to the Curve forum every few hours and encourage members to comment…full court press
  2. Pass the boost vote and be ready to deploy funds
  3. Develop pJar X
  4. Tweak the UI and simplify it. Right now we’re kind of in between the original meme-y site and a professional FI dashboard.
  5. Get ourselves on DeFi Pulse, again maybe mobilize the community for this. If all that’s holding us back is audits, we could try to get a commitment from them to list us upon whitelisting?
  6. Marketing boost to spread awareness
  7. Drop the internal switching fees

That’s just Phase I, and if we can accomplish it, I have no doubt that we can attract $100M+ to this new pJar. From there, to infinity and beyond!

Plan B if the Curve whitelist fails

Nothing really changes from a development standpoint.
Attracting TVL will just become harder as we’re going to have to consider alternate, much smaller sources of stablecoin liquidity (Swerve etc)

Phase II

The ultimate objective should be single-asset PickleJars that automatically switch between the highest yielding strategies.
Once we have implemented the simplified one-click PickleJars across all the major assets (USDC/USDT/DAI/BTC/ETH), we focus our development efforts towards this.

I have plenty of ideas for Phase III, including one major opportunity in the crypto space that nobody seems to be eyeing yet and could really take us to the next level, but let’s take one step at a time.

Thoughts on Current Issues/Proposals

Internal Switching

This should be implemented ASAP.
Rule #1 You never let the customer leave the store.
Let people shop for yield, but internally!
Once they hit withdraw, there’s no guarantee they’re ever coming back.

Fee Structure

Though it might be unpopular, you should NEVER drop withdrawal fees when your AUM is dropping and stock price is tanking because that is when people WANT to leave.
The time to transition to higher profit sharing and management fees is when folks are throwing money at you and nobody wants to leave.
In my opinion, dropping the withdrawal fees right now would be handing our competition the keys to the kingdom.
The loudest voices calling for the drop in fees will be the first ones out the door, regardless of what they say now about the greater good and attracting fresh TVL.

Yearn is taking this step out of desperation imo, as they are no longer competitive in APY terms. Why blindly copy the move when our APYs are far higher?
At the very least, we should wait for them to actually implement it (I believe they are still at the voting stage) and see the results before taking a decision.
Uniswap mining ends in under a month, and since we had the withdrawal fee from inception, everyone in the UNI pools has (or should have) factored it into their investment calculus.
That’s potentially $450K in fees that we’re saying goodbye to…and for what? A possible boost in TVL that may or may not materialize? We simply can’t afford it imo.

The same goes for the profit share…the time to hike is from a position of strength, not weakness.
By hiking fees now, we will anger our current TVL, especially the UNI pools.
Just as an example, look at the UNI USDC/ETH farm which is currently at 30% APY
This would drop to 23% under the new fee structure, combined with no withdrawal fee.
If I’m in this farm, what’s my incentive to stay? I might as well leave for free and farm something else.

It’s easy to project that we would earn X more under the new structure, but what happens when half the TVL leaves? You’re just taking a bigger slice of a smaller pie and that’s a recipe for disaster, long term.

I know that everyone’s seeing the FARM pump and asking themselves how we can replicate it, but should we?
One of Pickle’s key differentiators is the low fees (too low imo) and I am in favour of increasing it to around 15% + 1% annual AUM fee in lieu of withdrawal fees, but again, this should be done later from a position of strength.

I think our emissions schedule is fine…SNX’s model is tried and tested.

I urge EXTREME caution when thinking of turning these levers because these are make or break decisions.

Hasty changes to fees and emissions in response to short term price action is what has landed Dracula in their current predicament, and I would hate to see that happen here.

Staking Rewards

I think it makes sense to pay out staking rewards in PICKLES by having the Treasury buy PICKLES with the weekly staking rewards.

Matching the underlying asset with the reward usually is a good thing.
Currently, if PICKLE goes up, staking APY comes down (assuming 35K/week stays constant) but people are happy because PICKLE went up :slight_smile:
When PICKLE goes down, staking APY goes up, but as we’ve seen this week, fees were only 18K so real APY went down and stakers are not happy :frowning:

If we were to pay out rewards in PICKLEs
When PICKLE goes up, staking APY goes down and users get less PICKLES, but everyone is happy because PICKLE went up :slight_smile:
When PICKLE goes down, staking APY goes up, fees might go down again but the same $ can buy more PICKLEs…stakers get more pickles and are less unhappy :expressionless:

Though this approach may be considered mildly ponzinomic, I think it’s the best option, and the community seems to prefer it.
In my opinion, most stakers aren’t doing it for the reward. They’re in it because they’re bullish PICKLE and the reward is just a bonus. Give the people more PICKLEs!

I also believe that a discussion on voting rights for stakers is long overdue.
Only once stakers have a vote will PICKLE become a true governance token. We can then make progress towards a true DAO.

Treasury Discussion

I’ve seen a lot of great ideas regarding the Smart Treasury, investing some of the Treasury funds, paying the surplus back to stakers etc.
All great ideas for the future, but we simply don’t have a big enough Treasury at this time to take on additional risk.
We need to build up the Treasury to at least 1M before implementing any of these.
This would allow us to smooth out the staking rewards…ie dip into Treasury in weeks like this when fees are low.
After we establish a suitable reserve, we could definitely look to diversify the Treasury or just pay the excess back to stakers.

Marketing

This is our Achille’s Heel. Sorry to be blunt, but our marketing game is ABYSMAL.
I know that a major reason for this is limited team bandwidth.
We obviously want our devs to focus on what they do best, so we as a community need to take the initiative.
There’s far too much to say on this topic, so I’m going to end here since this post is already far too long.

If you’ve made it this far, I salute you as a true Pickle Private!
Thank you for reading!
I know I’ve expressed a lot of strong opinions here. Please know that my only intention is to help PICKLE succeed.
I’d love to hear any and all feedback.

The decisions ultimately lie with the team and community.
If the consensus is to go for a ‘pump the coin’ strategy, I’d be personally disappointed but I have a lot of ideas for that too :slight_smile:

May the future of PICKLE be bright!

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@Larry_Cucumber
First, thanks for your answer. Yes, I know that it is not possible to “delegate / transfer” your VeCRVs, that’s why I am talking about CRV tokens

I was rather thinking of a “bonus option” for people who would like to boost their interests while contributing to the Curve protocol:

  • option 1: I participate in ps3CRV but I don’t have a CRV / don’t want the CRVs I own to be “delegated” (for some reason). So I benefit from a “base” return as it exists today.

    User 1 stake 3CRV in pJar 0c = LP 2.66% + CRV 11.83% (apy when I wrote)

  • option 2: I am ready to “lend” my own CRV (obtained by cultivating them, or after having bought some). So I benefit from a “boosted” status, the yield is maximized for my participation in the construction and maintenance of the bridge between our 2 platforms.

    User 2 stake 3CRV in pJar 0c = LP 2.66% + CRV 11.83% + Boost 15% (estimate)

This option would not be compulsory, it would be specific to each participating address. The option chosen will not impact the opposite choice (this is the main point of my question as to the possibility of such an option).
Those who activate the option show their support for Curve in addition to Pickle and are “rewarded” for that by obtaining the Boost.

Perhaps it is not technically possible to make these 2 options coexist in the same jar?

In my example, the share of CRV that I would have to contribute represents about 2.42% of my initial contribution (if I were to “self-finance” the boost). I do not see or imagine that this could be an entry barrier, especially since the total return would allow this “constraint” to be quickly amortized (1 month with an apy of 29%).

I hear a lot of people say they’re at Pickle for the long haul (I’m one of them). What I am proposing would prove that our commitment is voluntary and in full confidence. This proof of “love” could encourage old and new users to do the same …

As specified in the introduction, I am talking about CRV tokens, they are not intended to be locked by the user but by a Pickle contract (thus a delegation / transfer seems possible to me).
Certainly they would be locked for 4 years and as far as I’m concerned, I’m ready to accept it, like anyone who agrees to lock their own CRVs into a Curve contract.

If I want to leave pJar 0c before the end of the lockdown, I will only be able to get my CRVs back at the end of this period! What seems to me highlights a few opportunities:

  • at the end of the 4 years, the CRV token could be more expensive and thus this locking would be a “bet” on the medium term.
  • the CRVs locked during the period between my exit and the end of the 4 years would be intrinsically allocated to all the other “boosters” users, thus increasing their output.

To conclude :
I can understand that my proposal is complicated to apply, see that it is totally infeasible because of its mechanics.
I am not a developer and cannot appreciate some implementation difficulties.

All this just to know if it is possible to differentiate the returns and income of different users in a common contract (pJAR 0c), according to their involvement in the Boost or not.

Either way, and if it’s achievable, I think it might attract new investors and / or get old ones to exploit the Curve-Pickle tie-up. This would increase the TVL and consequently the treasury expansion to the delight of all Pickle participants.

Sorry if it’s too long to read, I’m just trying to be clear in my reasoning.

But above all that the treasury would remain intact or slightly impacted if it wished to co-finance the contribution of CRV from boosters users. The saved funds could be allocated to something else (audits / marketing / bug rewards / NFT …).

2 Likes

LOVE THIS POST. It’s everything that we should be striving towards. A successful DAO will need to be patient, and cunning - what you say about lowering withdrawal fees is so true, it just gives those who want to jump ship an easy way out. Batten down the hatches boys.

  • will edit more onto this in the morning
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I agree with @yyctrader and add the idea below to pJars. While I strongly agree with the Stablecoin, BTC and ETH focus for large & long term TVL/AUM. I think Pickle needs to also listen to the market. There is a strong demand to chase APY and why not “give it to them”. Why not offer yield for boomers and for young, riskier players.

I see Pickle offering these jars/strats:

  1. Stablecoins / ETH / BTC = largest TVL/AUM
  2. Single asset (ie: pJar88) = everyone wants more of this
  3. DEGEN - riskier with higher yield = would generate excellent fees

*We create & break out jars into these areas & do what yyctrader is proposing.

Smart Treasury (see other forum post):
This is very important and while the impact would be greater at $1mill, it’s still something we should start building.

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Finally got around to allocating sufficient time to read this properly rather than skim read. Some amazing points made in here, can’t wait until the core team have time to review and respond properly also.

The Curve vote is indeed important … but it would be good to have Plan A and B in place for when that ends (just 3 days away).

The only one I am not completely sold on is rewarding Pickle Staking with Pickles, although not against the idea either. Might actually make sense for your staking balance to grow which creates more share of rewards. The value could be calculated in the same way (ie $35k/$18k worth of Pickles bought). Not much in the way of market impact but still a sign of strength that Pickle is buying back its own token.

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Thanks for the feedback :slight_smile:

Yes, the Pickle on Pickle rewards is the one thing I wasn’t completely sure of either.

It seemed like the least of the ponzinomic evils since most of the community (at least on Discord) seems to want more Pickles and would use those funds to buy Pickles anyway…so we’re just adding a convenience factor.

Like you said, the resulting buy pressure would be negligible but it makes for good optics.

Thanks for clearly breaking things down into the two scenarios @Tomato_Juxx. I see what you’re getting at now.

Unfortunately, it would take an immense engineering effort to implement this such that it’s not really feasible at all. On Curve’s side, the entitlement to a certian level of boost is determined based on the locked CRV in the CRV locker smart contract (see ours here: https://etherscan.io/address/0xb5208a3754a8592e2e934d4e1e7b985ed3ae78a1#code). We’re not able to provide two flavours of Pickle 3pool deposits (one in which participants haven’t provided their own CRV and one in which participants “lend” CRV to us) such that Curve can provide separate boost levels for each one.

Because of the above, we would have to maintain our accounting system for who contributed CRV and who did, and manually re-allocate rewards received from staking in Curve according to the accounting. This is exceedingly complex in terms of having to write a LOT of custom code, which therefore introduces smart contract risks. It might as well be two different pools where our treasury funding for an initial boost is split between the two pools.

I really do appreciate your idea, but there’s not really any way I see this working.

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