As part of the protocol’s transition to ungovernance, the DAO will manage any remaining (still governed) parts of the protocol which includes incentive distributions for Curve RAI pools. At the moment, incentives are handled through Votium which is incompatible with DAO votes that distribute incentives. This means that at least for now (starting on 15th of August 2022), RAI-3CRV LPs will start to receive monthly incentive distributions similar to the ones for Uniswap v2 & v3.
First, I want to highlight the exceptional progress made toward the protocol’s UNgovernance. Part of shared and fostered culture of our community stems from a belief that better outcomes are begotten of better systems. I’m happy to be a part of a community that shares in the first-principals approach of letting the protocol “just work”, and perhaps most importantly, turning OFF any party’s ability to mute the immutable.
This approach is not without its own quirks as there are some incentive campaigns that will require tweaking.
Ungovernance requires all FLX emissions from the DAO needing a full proposal on Tally (on a monthly basis). For this reason, it has become untenable to continue Votium bribes, which is the mechanism RAI has used to participate in the “Curve War” and boost yield for RAI-3CRV LPs. The main reason why the DAO’s participation in Votium is unlikely to continue is because there are mechanical hurdles preventing the correct administration of the FLX. The Votium protocol is incompatible with DAO voting meant to regularly distribute incentives .
RAI-3CRV is constructive for protocol stability (along with its sister pools of UNI v2 RAI-ETH and UNI v3 RAI-DAI). Each of RAI’s three primary pools have different characteristics which make them both important for protocol stability and attractive to users of RAI. With that in mind, it may be a good idea to continue incentivizing RAI-3CRV.
Currently, the DAO directs 40 FLX per day to Votium, which is the second most incentivized campaign, excluding FLX staking. Stakers of RAI-3CRV on Convex have historically yielded APRs in the high-single-digit to low-double-digit range. The extent of variables affecting this yield (both now and after this proposed change) are myriad and make forecasting yields a tenuous exercise.
I propose that for the next months we directly incentivize holders of RAI-3CRV LPs with 40 FLX per day. Importantly, I propose to exclude large wallets like Convex, who I presume to be unlikely to claim and will dilute the APY for other parties. However, I do not support excluding general LP lockers that are designed to aggregate smaller user’s funds to claim FLX in order to offset transaction costs (if these aggregators are to exist). Within the next months, I would support that the 40 FLX per day for this proposed campaign could only be reduced proportionally to all other campaigns (excepting FLX staking).
Although there is a good chance the FLX generated from holding RAI-3CRV could remain an attractive opportunity, the DAO should be revisiting this arrangement in three months’ time and will gather feedback from the community on alternatives that may be both feasible and more efficient.
Although I expect that there will still be a relatively attractive yield on Convex for RAI-3CRV holders, Reflexer’s support of the Convex ecosystem through Votium bribes will be moving away for the time being.
We ask the community to voice their opinions on this matter.