Currently, Alchemix DAO is going through Votium to incentivise the alUSD3CRV, alUSDFRAXBP, and alETH Curve LP pools. We use Votium over direct incentivisation because there is a multiplier on our incentives. Simply put, for every $1 in incentives via Votum, our LPs get more back in CRV and CVX tokens. This information is public to see at https://llama.airforce/#/bribes/overview/votium/cvx-crv, and currently, the multiplier is $1.43. These incentives are then distributed to vlCVX holders who vote for our incentivised pools.
There are other services that do the same thing, but target individual veCRV holders instead of the veCRV held just by the Convex Protocol. Alchemix has used these services in the past, but has moved away from them for a couple of reasons. First, the incentives had to be paid out weekly, requiring more operational overhead. Secondly, it requires individual veCRV holders to pay attention to this market and manually vote to accept the incentive. Lastly, since it requires individual veCRV holders’ action, many don’t adjust their vote unless they’ve seen the incentives consistently posted, meaning it takes a while before they become economical, whereas on Votium, their veCRV votes are always proportional to the size of your incentives.
StakeDAO will soon introduce their own platform similar to Votium, Paladin Quest, and Curve Bribes. It has some key features that distinguish itself from the other veCRV direct incentive platforms. First, it enables the blacklisting of certain addresses. This would prevent our incentives to individual veCRV voters going to Convex/Votium (since we vote with our vlCVX, we’d be paying ourselves and making our voting power redundant). We can even blacklist our address from receiving incentives for when we vote with our sdCRV. This is important because these platforms charge their own fees. For Votium, this is 4% and for StakeDAO, it is 2%.
Secondly, StakeDAO’s platform allows you to pre-fund an arbitrary amount of time for incentives. This could be a one-off incentive, or one that runs for months on end. Again, as pointed out earlier, since veCRV holders tend to only vote for incentives that are offered consistently, this feature gives them confidence that the incentives will be sustained long-term, increasing the likelihood that they change their votes for our pools.
Lastly, we can set a target price per vote. This is important because if there is a lag when waiting for veCRV holders to switch their vote to us, we won’t overpay in the interim. This is a very important part of the calculations to determine whether Votium incentives are more economical than direct veCRV incentives. In this chart, we can see that veCRV votes can be obtained more economically on average than vlCVX incentive, but that is assuming that users are aware of the incentives and switch their votes to us.
Proposal:
While Alchemix DAO is interested in maximizing the economic efficiency of our incentives, we think it is too risky to switch all of our Votium incentives over to StakeDAO. Instead, we would like to see a data-driven approach to evaluate their new platform, and if the numbers come back better than Votium, we can begin a transition over from Votium to StakeDAO. The transition should not be sudden in our opinion regardless because of voter lag inherent to direct veCRV voter incentives.
Currently, we incentivise the alUSD3CRV and alETH crv LPs with 2000 ALCX/week each. We are proposing to keep this baseline number the same, but with 12.5% of the total going to StakeDAO for the duration of a 6 week trial. That would amount to a total of 1500 ALCX going to StakeDAO’s Curve incentives over these 6 weeks. Upon the 4th week of the trial, Alchemix DAO will provide data regarding their economic efficiency, and if they are indeed more economical, we will present a follow up proposal to transition our incentives over from Votium to StakeDAO.