Gro Rewards Allocation Discussion

Idea

  • Reduce or eliminate GRO:USDC and GRO:WETH staking rewards
  • Leverage new DeFi primitives such as Olympus Pro, Tokemak, and Ondo Finance to help bootstrap $GRO token liquidity
  • Reallocate GRO:USDC and GRO:WETH staking rewards to the GRO:Vault, Vault, and PWRD - 3CRV

Why?

Yield farming is a costly way for protocols to distribute tokens to a broad community, and there are cheaper ways to do so than paying 400%+ in rewards. Primitives such as Olympus, Tokemak, and Ondo significantly reduce the cost of liquidity, presenting an opportunity to reallocate GRO rewards more effectively to those who purchase GRO products.

The GRO:Vault, Vault, and PWRD-3CRV pools require the user to purchase a Gro product before staking, which results in ecosystem participation. Since these users are more exposed to the systemic risk of the Gro platform, they should be rewarded with the reallocated GRO:WETH and GRO:USDC rewards.

How?

Gro can partner with Tokemak similarly to the Alchemix:Tokemak partnership. Gro DAO can engage in a DAO-to-DAO treasury token swap with Tokemak to help fund a Gro liquidity pool.

Another option would be to pilot the Ondo Liquidity-as-a-Service offering, where Gro DAO can allocate a portion of the Gro treasury tokens into an Ondo Vault; this amount would be paired with Fei to LP on Uniswap or Sushiswap. Currently, the program lasts 30 days and at the end of the 30 days, Gro DAO would pay a 0.17% fee (2% annual fee divided by 12 months) on the total value of $GRO in the vault at expiration. This 0.17% fee can be partially, if not fully covered, by the accrued trading fees of the vault. The key risk here is impermanent loss.

For a much better explanation on cheaper alternatives to yield farming, read this Medium piece - New Approaches to Liquidity in DeFi by Fei Protocol founder, Joey Santoro.

More resources on the Fei-Ondo partnership here:

Thoughts?

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Bruno here from Fei community.

Great to see this discussion starting. Fei and Ondo are forming the launch group for this Liquidity-as-a-Service (LaaS) offering. If you want to see some simulations you can use this worksheet.

It is a good way to increase liquidity with a low cost and gain more awareness by participating in this innovative partnership.

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