Introduction
Paladin has approached Alchemix regarding their new Warden Quest platform. Quest offers the possibility of an efficient spend on liquidity by establishing a parameterized incentive structure for veCRV holders. In the event that the target number of veCRV votes is not secured, the maximum payout is limited. Likewise, if the number of veCRV votes attracted exceeds the maximum required, the payout is capped at the budgeted amount. The platform incentivizes long term voting by allowing protocols to allocate bribes for a specified value and period of time (ie, a Quest), and prioritizes bribe payouts based on the longest standing voters.
In order to evaluate the Quest platform, it is proposed to conduct an initial trial for the Curve alETH pool, given that pool has been more resilient to market events and changes.
Proposal
It is proposed to create a quest on Paladin Warden to incentivize the Curve alETH pool. This quest will have the following parameters:
- Desired amount of veCRV: 4M over 8 weeks (@ $30/ALCX, 0.015c per vote)
- Reward budget: 2k ALCX
- Duration: 8 weeks
- Target cost per vote: $ 0.015
- Blacklisted Addresses: Blacklisting is required to prevent double-dipping with vlCVX and other rewards. We will blacklist vlCVX, and we will work with stakeDAO/Paladin to determine how to best prevent ourselves from receiving Paladin Quest bribes.
This quest will run parallel with the existing ROOK deal from Tokemak C.o.R.E.3. The ALCX for this proposal will be sourced from the Alchemix treasury.
In advance of the conclusion of the 8 weeks quest, a new AIP will be produced to determine any follow-on allocation, based on the performance of and our experience with this quest.
Rationale
New strategies are emerging to provide greater efficiency when securing liquidity, and Paladin’s Warden Quest platform can play a role in servicing alAsset liquidity needs. A trial of alternative incentivization platforms was hinted at in the recent C.o.R.E.3 voting update, and Alchemix has been in discussion with Paladin over a number of weeks. Paladin beleives veCRV votes can currently be secured at 0.015c/vote, which is cheaper than the historical cost of vlCVX votes.
For an overview of how Quest works, see the Paladin Medium post Let’s go on a Quest!:
Quest creators can set the desired amount of veCRV that they want for a gauge, set the reward budget with a whitelisted reward token, and then specify how many periods they want to run the Quest to know exactly how much they’re spending for 1 vote of veCRV. This fixed cost is paid out to committed voters on a weekly basis.
Since Quests have an objective target of votes, only the votes that fill that amount are counted for the reward distribution, sorted from the oldest to the newest vote. For example, if the objective is 1 million votes, and the Gauge receives 1.2 million, only the first 1 million are rewarded. This way, continuous voters are always prioritized and rewarded for their loyalty to the gauge.
The ALCX for this proposal will be sourced directly from the Alchemix treasury, but is implicitly funded by the amounts redirected from Olympus Pro bonds. The amount equates to 1.8% of emissions for the duration of the quest.