I'm all for this. We should put a subsequent BIP up to build up PoL.
Ben This proposal facilitates BottoDAO to pursue long-term, sustainable liquidity. Outside of raising funds earmarked for PoL, other potential solutions that may be pursued include:
- Centralized exchange (CEX) listings
- New incentive structures for LPs such as increased VP allocation
- Using $BOTTO burn equivalent to build PoL
Definitely! This is what we are actively looking at. The signal that this BIP should send is that we're looking at building out sustainable paths forward, and that this isn't just kicking the can down the road (I understand why this has come up). The LM Programme in terms of rewards is not sustainable in its current form. This is not to say upon contract ending that there won't be another iteration, just that we should align economic incentives with participants and the DAO better.
A simple example would be splitting the 50% voter rewards into two pots: one for governance stakers, and one for LP providers staked in the LM contract. LM stakers can receive a higher proportion of these rewards provided they vote. $394,000+- USD in rewards were distributed to participants in 2023. This can be feasibly directed more towards LM stakers directly (splitting the reward value and distributing proportionate to LP staked) or by proxy (receive more VP relative to your stake).
Couple this action with the DAO building its own PoL further (take the equivalent of what would have been burned, and match a percentage of it using a portion of the 50% Active Rewards), that would be in my opinion ideal. To crystallize this idea a little bit, imagine 10% of the active rewards is allocated directly into PoL with the BOTTO equivalent. Using the 2023 rewards value of $394k USD, we're looking at about $79k USD in added PoL. It's not a lot, but it's a concrete start.
Ben BottoDAO may use up to 4M treasury $BOTTO for such OTC deals and/or other liquidity solutions. This is independent of the $BOTTO allocated for OTC in BIP-35.
This is also a clear way in which we can build PoL significantly faster to remediate long term PoL concerns. It is subject to timeliness (token price is the obvious one), deal structure with OTC partner, and also state of other liquidity solutions (i.e. CEX listings).
It should be noted that discussions in the DAO are already ongoing on other ways to amplify PoL. For example, sync has recently proposed in Discord other ways to build PoL, i.e. 1) taking 10% of weekly revenue and matching it with BOTTO, and/or 2) generating ETH through special edition access passes, where the DAO pairs the ETH raised with the apportioned $BOTTO to PoL initiatives. I believe @thomahawk69 also mentioned ETH raises through the community at some stage as well, albeit in different form. I think there are a lot of ways in which we can activate PoL over time, and this BIP is the preliminary step forward.
I hope this is indicative of the direction I see us moving.