Vote 013: Allocate up to $600k to incentivize PWRD3CRV Curve pool

Background and Summary

  • Gro ran 2 rounds of Votium incentives in April for the PWRD3CRV meta pool on Curve with 69,000 GRO and 35,000 GRO tokens respectively.

  • Outcome of the incentive system was encouraging. PWRD3CRV liquidity grew $15mn to reach $28mn, with PWRD TVL in the pool increasing from $9mn to $13mn. This increased utilisation ratio and Vault yield, driving total protocol TVL up from approximately $40mn to $54mn.

  • To continue growing the pool depth and TVL, further incentivization for the PWRD3CRV Curve gauge through Votium or other may be required. This proposal asks the Gro DAO to allocate up to $600k for this purpose.

  • So far mostly liquid GRO tokens were used for Votium incentives, this proposal explicitly permits also the usage of Gro Treasury’s stablecoin assets to buy back GRO tokens from the open market (up to the allocated $600k) to use for incentives.

  • Implementation can take various forms using a mix of GRO, Vault, PWRD (acquired with USDC) for PWRD3CRV incentives. This vote gives DAO contributors, Grwth Lbs and Wojak, the mandate to devise implementation plans so that Gro incentives are utilised to the highest efficiency possible.

Vote 013: Allocate up to $600k to incentivize the Curve gauge allocation to the PWRD3CRV pool

Proposal that Gro DAO allocates up to $600k to incentivize CRV allocation to the PWRD3CRV meta pool through Curve gauge. The sum could be funded by either GRO, USDC, PWRD, or Vault tokens in Gro Treasury; DAO contributors, Growth Lbs and Wojak, will experiment to best deepen liquidity and increase TVL of Gro protocol.

A suggested implementation is using the stablecoin assets in Gro Treasury to buy back GRO tokens; it is possible to use USDC directly or through first depositing USDC for Gro Vault tokens (GVT) and using them to buy GRO tokens for incentives. This increases Gro TVL and Vault supply at the same time, which increases the capacity to mint more PWRD. Alternative implementation could be providing LP tokens such as PWRD/GRO on Uniswap v2 to incentivize allocation of CRV rewards to the PWRD3CRV pool if Votium or similar platforms allow. It would require experimentation to understand what combination would provide the highest capital and operational efficiency.

The allocation would remain in Gro Treasury until deployed via the multi-sig for PWRD3CRV incentivization. There is no fixed timeline or min/max amount for each round of incentivization.

When the funds run out, the multi-sig would transfer no more funds (in excess of the amount “borrowed” from marketing spend - see details in second part of the risk section) to Votium or similar platforms without another DAO governance approval. DAO contributors will need to return to DAO governance for further allocation. If such incentivization is discontinued as they are no longer deemed productive for PWRD liquidity and/or Gro protocol TVL, the remaining sum in Gro Treasury will be free to be used for other purposes. If the funds are not being deployed for 6 months, they will also no longer be earmarked for PWRD3CRV incentives.

Risks of approving the proposal and steps to mitigate

1. Risk that there is insufficient funds in the Gro DAO Treasury due to other commitments

There are currently $25mn assets in Gro Treasury; $600k only accounts for 2.4% of all treasury assets. Gro tokenomics also allows for up to an additional 8mn Gro DAO tokens to be minted by the treasury if required. Combining the above, it is unlikely that other near term commitments would take up enough funds to render it impossible to afford the $600k incentives. In the event that there are not enough tokens of a particular type, the multisig can swap for or deposit to mint the required tokens.

2. Risk that what remains of the allocated funds are insufficient to achieve the goals of deepening PWRD3CRV liquidity and increasing protocol TVL

Mitigated by the ability for DAO contributors in seeking DAO governance in allocating more funds to incentivise for votes towards the Curve Gauge of the PWRD3CRV pool. In the scenario where there is not yet another DAO governance vote in time to support the next round of incentivisation, the multi-sig could be instructed to allow for a +10% flexibility (i.e. transfer an additional 10% of the funds allocated i.e. 10% x $600k = $60k) while a vote is waiting to be wrapped up. This would be considered as “borrowed” from the marketing budget.

3. Risk that the funds are no longer efficient in deepening PWRD3CRV liquidity or increase protocol TVL

There is a cap of $600k for incentivisation. Should they prove unproductive, DAO governance will have the full rights to decline further allocation to incentivise PWRD3CRV Curve gauge.

Next steps

After 7 days in the community forum, if there are no major unresolved objections or comments then the proposal will be posted as a vote at https://vote.gro.xyz where it will remain live for a further 7 days.

We will use dedicated discord channels and the bi-monthly community call to discuss the proposal so that all DAO members are aware of the proposed changes and have the opportunity to consider and discuss ahead of voting.

Should we allocate up to $600k from the DAO to incentivise Curve gauge allocation to the PWRD3CRV pool?

  • Yes
  • No

0 voters

Please see more information about the past 2 rounds of PWRD3CRV Curve Pool coming from Llama Airforce (thank you @Slacking for the suggestions!).

  • Round 15: $128.08K distributed to Votium with $0.58496 in incentives per vlCVX (total allocation: 69,000 GRO), resulting in a surge of CRV emissions allocated to the pool that peaked at $31.5K

  • Round 16: $ 58.35K distributed to Votium with $0.46466 in incentives per vlCVX (total allocation: 35,000 GRO); CRV emissions went down accordingly but with higher efficiency

  • Total value locked in the PWRD3CRV pool went up after the initial boost and decreased slightly, but not proportional to the incentives change


Source: Llama Airforce


Source: Llama Airforce


Source: Llama Airforce


Source: Llama Airforce

Hi Joyce
Could you clarify something: if the Vault:PWRD ratio is currently “full” ie no more PWRD deposits are available until further VLT deposits occur, is this strategy of bribing to encourage PWRD3CRV uptake a waste of funds?
Might be missing something here
Thanks
C

1 Like

Hi @chagsy - you’re right that when PWRD TVL is almost as high as Vault TVL, additional incentives wouldn’t be as effective in increasing TVL (even though it may help retain PWRD TVL).

We should look into having a guideline to when we allocate funds for incentives - in terms of utilisation ratio or absolute dollar gap before PWRD reaches utilisation limit. Tagging @chriswong for awareness.