[RFC] re-Vote - Whitelist The veToken Protocol

Summary:

This proposal is to re-vote the request to whitelist veToken Finance in Pickle’s “Whitelist” contract, allowing vetoken Finance to participate in locking PICKLE permanently and provide boosted rewards to Pickle LPs.

For more details, you can read about veToken here

Abstract

  • veToken Finance provides a boost to PICKLE LPs without auto selling rewards, while taking a small performance fee on only PICKLE itself.
  • veToken Finance provides more rewards to PICKLE stakers by passing performance fees to PICKLE stakers.
  • veToken Finance hopes to simplify the DILL boosting system and provide more incentives to locking PICKLE.
  • veToken Finance works in a similar capacity as Convex Finance & Yearn Finance work with Curve.

PICKLE locked in veToken will be locked forever. A tokenized (vtDill) version will allow users to trade their vtDill back to PICKLE at any time through incentivized pools. Majority of veToken performance fees on Pickle Finance will be given to vtDILL holders as normal PICKLE (45%) with most of the rest being locked and tokenized as vtDill and given to VETOKEN stakers (4.5%). There will also be a small 0.5% fee for gas incentives for claiming rewards from gauges and keeping the system moving.

Motivation:

As DeFi farmers ourselves, we saw a need for a platform that allowed users to receive the max boost possible from PICKLE and other projects that adopt voting escrow token economics in a simplified manner. veToken Finance aims to enable more users to be onboarded into the PICKLE ecosystem by making it easy and painless for users to receive better yields on their PICKLE and PICKLE LP tokens compared to what the average user might receive on their own.

Specification:

The PICKLE DAO needs to execute the following function on Smart Wallet Whitelist to approve the veToken Finance contract

By doing so, veToken Finance will be able to lock PICKLE permanently and thus receive boosted rewards, and receive Dill rewards.

Notes:

  • veToken Finance has completed its audit with Quillhash (link).
  • veToken Finance is supported by the Pickle core team.
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Current DILL holders get their boosts only for their holdings and can’t share them between themselves. Majority of the users don’t deposit into many farms, and they have their boosts only on a few farms while the rest of the boost is wasted. Also, current DILL holders are locked and can’t sell.
To illustrate this better, a typical DILL holder boosts 1-4 farms for 1 user and the boost for the other farms is wasted. veTOKEN’s DILL will boost likely all available farms (tens of farms when DILL starts to boost other chains) for hundreds of users. None of your DILL boost will get wasted.
Or in other words:
John locks 10k DILL and boosts ALCX farm wasting all other boosts
Tom locks 10k DILL and boosts SPELL farm wasting all other boosts
Paul locks 10k DILL and boosts USDC farm wasting all other boosts
veTOKEN locks 30k DILL, has 100 users and these users utilize 100% boosts. No single user ever locks DILL himself, because it makes more sense to lock through veTOKEN.

vtDill will provide boosts to a large group of veToken users, the boosts will be shared and distributed among many users, markedly diluting boosts of the current DILL holders. Also, vtDill can be used for speculation and dumped.

Other than potential Pickle price appreciation, and TVL increase, what’s in it for DILL holders? Why would DILL holders want to share boosts with a big crowdfunded DILL account when they can keep the boosts for themselves? Why add a player with liquid tradable DILL while we’re locked?

I’m not saying it’s a bad value proposition, but can you make the offer better, now that it has been rejected once? For example, a small proportion of PICKLE rewards could get burned on the 0x00000000 address.

Also, what do you mean by “performance fees?”:
“Majority of veToken performance fees on Pickle Finance will be given to vtDILL holders as normal PICKLE (45%) with most of the rest being locked and tokenized as vtDill and given to VETOKEN stakers (4.5%). There will also be a small 0.5% fee for gas incentives for claiming rewards from gauges and keeping the system moving.” - where does the missing 50% go?

I’m not sure I understand this fee schedule from https://vetokenfinance.medium.com/vetoken-finance-pickle-pre-launch-announcement-ef18c1ba7ead:
“In all, there is a 16% total platform fee: 10% will go to vtDill stakers (as PICKLE), 5% will go to VETOKEN stakers (as vtDill), and 1% will go to the harvest caller in order to reimburse gas fees for contract functions and the gathering and distribution of rewards to respective contracts (as PICKLE).”

Can you please clarify the fee schedule?

veToken’s target is the retail farmer who is less likely want to lock Dill for 4 years, but still would like to earn the Pickle protocol fees. Just to give you a reference, CVX helped CRV to lock more than 30% CRV to veCRV permanently.

For existing DILL holders, the direct benefits exist in that there will be more Pickle locked permanently, so there will be less Pickle on the market to trade. Less supply of course leads to driving up the PICKLE price. And there is no any negative impact on existing DILL holders.

With the help of veToken, more PICKLE is permanently locked, and thus PICKLE in the market is reduced – each individual pJar APY is increased – more users deposit pJAR – TVL increased, more protocol fees – more Pickle permanently locked.

Regarding the performance fee, it is the protocol revenue from PICKLE. Currently, 45% of the protocol revenue is distributed from all DILL revenue on weekly basis. And those revenues are mainly coming from LP farming (pJar). veToken will take a 10% fee that’s generated from Pickle LP (or so Called pJar farmer, and pay the vtDILL/DILL liquidity provider as incentives, with 5% paid to VETOKEN Stakers, and 1% for the harvest caller.

In brief, whoever uses veToken in staking pJAR will have boosted rewards with the 16% fee that’s collected from veToken, and the 16% fee that is gathered from veToken to distribute to vtDILL/Dill LP providers, VETOKEN stakers and 1% to harvest caller.

Note that fees are taken only from PICKLE revenue that’s generated from LP stakers (or pJar stakers); no fees are taken from Dill or vtDill stakers.

I’m deeply familiar with Pickle finance and I still don’t get it. Could you please explain it to me like I am five years old?

by vtDILL/DILL do you mean vtDILL/PICKLE? DILL is not tradable

so you take 10% fee from the weekly 45% profit distribution to DILL holders, and you give 5% to vtDILL/PICKLE LP pool, 1% to harvest caller, and where does the remaining 4% go?

Can anyone call harvest?

You have lost me with the 16% fee, sorry.

“no any negative impact on existing DILL holders” - I have just explained it to you in my post, that there will be boost dilution. Currently, DILL holders use approx 0-10% of their boosts. You’ll use approximately 100% of the boost that comes with your DILL. The question about the extra profit for DILL holders still stands.

Thanks for the following up, I should explain it in a simple fashion.
16% fee is nothing to do with 45% profit distribution to DILL holders.

In short, the tentative proposal is that:
16% fee generated from pJar farmer

  • 10% to vtDILL/PICKLE LP provider
  • 5% to VETOKEN Stakers
  • 1% for the harvest caller.

Regarding the boost dilution you mentioned, I assume what you meant was pJar boost dilution for Dill Holder once veToken bring more deposits to pJar.

I don’t think it can easily include whether it will be a boost dilution for Dill holder or not, as veToken will attract more users permanently lock Pickle, thus PICKLE in the market is reduced – each individual pJar APY is increased. (As I stated in the previous post). It’s a positive feedback loop. You might get less Pickle when you use pJar pools, but since the Pickle price will be increased, your overall return will still remain high. Plus since more deposits go into Jar, the overall Pickle protocol revenue will be increased, which is very beneficial to the Pickle project in long run.

In summary,

  1. With the help of veToken, more PICKLE is permanently locked, and thus PICKLE in the market is reduced – each individual pJar APY is increased – more users deposit pJAR – TVL increased, more protocol revenue for PICKLE – more Pickle permanently locked. (Feedback loop)
  2. veToken fees are only collected from pjar users (16%)
  3. Whoever Locks Pickle to get vtDill, will get a share of the DILL revenue-sharing plus our own governance token reward.
  4. for Individual pjar, users not only get boost APY but also will be rewarded by our own governance token. - This will bring more despots and leads to more Pickle Protocol revenue as well.

Please let us know your thoughts, your feedback is very important to us.

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Thanks for clarifying, I think I understand your fee schedule now.

Users deposit LP tokens like ALCX-ETH or SPELL-ETH, into your contract and your contract deposits the LPs into pickle jars. You take 16% APY yearly fee on the entire amount (deposit + farming rewards) and distribute that 16% to:
10% to vtDILL/PICKLE LP provider
5% to VETOKEN Stakers
1% for the harvest caller.
That’s a lot of money for the harvest caller. Can anyone call harvest or is it just you? It will be a competitive market to get that 1% for harvest calls.

The boost dilution is 100% certain. I would like to sell my unused boosts but I’m locked and I can’t. I may have DILL that give me boosts on a token that I don’t like, for example USDC. My DILL gives 2.5x boosts on USDC that I don’t use. I would like to sell the boost but I can’t. veToken platform users will not have this problem, no boost will be wasted.

I think that your users will get an excellent deal on that DILL boosts that are soon coming to Arbitrum and Polygon. Almost every DILL holder uses boosts on 1-2 farms and the remaining boost is wasted.
Users of your platform will realistically deposit into each jar and enjoy 100% boosts while original DILL holders typically enjoy 5% or less.

That means that for every DILL locked by veToken, the boost dilution will be 20x or more in comparison to a normal person locking DILL.

Also, on extreme DILL pumps, vtDILL holders will be able to sell, DILL holders can’t.

I’d be keen for the voting proposal to have an options which asks for some extra perks for DILL holders so that the dilution that they suffer will be compensated.

I think that veToken is an overall positive development for Pickle Finance. It just significantly affects DILL holders’ boosts.

Another 2 questions:
veToken has potential to gather a lot of DILL voting power.
Who will decide what to vote for and how?
The vote power will apply to:

  • Pickle Improvement Proposals like emissions important protocol changes
  • DILL gauge deciding to which farms PICKLE emissions are going

Thanks, Jimmy for the comments
First of all, I believe only when Pickle Finance success can lead to Dill holders’ success. I am not very convinced of the dilution statements as all it matters is the APY, when the price of the prickle increased, even though the number of Pickle may be decreased for Dill holders’s pJar, but the APY will be stay the same or beyond. Plus existing Dill holders are also able to stake to pJar through veToken. This is actually happening for Curve. People are likely to stake in Curve LP through Yearn Finance, Convex Finance. But in the end, all the veCRV is locked at Curve smart contracts .

For the voting power, which is controlled by whitelist smart contract, technically we can only vote for gauge percentage. And VETOKEN holders are able to vote. As stated before, We will airdrop VETOKEN all the current Dill holders right before launch.

The purpose of veToken is to help the pickle project to lock more PICKLE permanently, which leads to TVL increase, Price increase, and DILL holder’s capital gain. And also will serve as a building block allowing more projects to join in Pickle through veToken. (Please reference Curve - Yearn – Convex – abracadabra – MIM )

I respect you guys have put lots of effort into contributing products for Pickle, and I think in order to bring this project to the next level, need more projects like us to enrich the ecosystems. As curve can not be reached to today’s position without Yearn, Convex, and other projects that build on top of it

Thanks for the reply.
What are the specific details of the airdrop?

You are welcome! As I mentioned, your feedback is important for us and it gives us direction on how you would like to work with us.

The airdrop is 1% of the Total Supply to Dill holders and voters who vote yes to the whitelist.
The tentative proposal is 0.3% to all the holders and 0.7% to the voters who vote yes.

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