Idea: Airdrop structure – drop to DAO, stake stable side, DAO provides token side, distribute rewards to holders

[tartakovsky]

So @Don_Luv has proposed this interesting idea:

Idea for a lobster farm. Tell me if this is dumb/impossible, or has already been proposed and I missed it:

• Protocol (i.e. Geist) does an airdrop only to the LobsterDAO multisig, not Lobs holders
• LobsterDAO multisig uses airdrop to provide liquidity, other half of the liquidity pair coming pro rata from lobs holders
• 100% of rewards go back, pro rata, to lobs who provided the liquidity

Benefits:

• For airdropping protocol a) This would give protocols giving us a airdrop more comfort about us not dumping, without need for vesting. So long as they only airdrop the DAO they only need to think about the DAO being a good actor and don't have to think about what proportion of Lobs holders are good actors, or worry about managing vesting periods.

• for lobs holders a) Allows Lobs to farm at a 50% discount as 100% of farm rewards (or 90%, whatever) could go back to lobs providing the other half of the pair. b) drives interest/another reason to hold/acquire lobs

• for LobsterDAO a) This mechanism grows DAO treasury exclusively by the value of Lobs it holds, and the airdropped tokens it receives, keeping little to non of the farming rewards. This way LobsterDAO is incetivised to see the long term success of projects it does this with in terms of token price appreciation. b) Allows LobsterDAO to manage/build reputation in the space as a good actor without needing to contend with user behaviour of 20% of holders who dump (or somesuch)

LobsterDAO itself could then manage when farmers get their rewards back, if it's not built to allow entry/exit at will and makes it easy for airdroppers. There would be some mechanics to work out re undersubscription and shifting price of pair while DAO members lock up their capital before it closes, but those are implementation details to which there are multiple solutions

[tartakovsky]

My argument against it was as follows:

One issue I can see is that the idea above assumes that all lobsters are stakers and it follows that only stakers will be rewarded for holding LOBS.

The assumption is clearly incorrect, e.g. I'm not playing the LP game too much.

The outcome is clearly unfair.

By going that way all the lobsters who are contributing in any other way except staking are not rewarded for their contribution.

[tartakovsky]

However, after debating some more there potentially might be a useful middle ground:

The core that TVL is a major part of what projects are looking for is probably quite true. We should pay attention to that fact and maybe structure our value prop around it. I was more playing devil's advocate against specific proposition to take away rewards from the holders into the DAO and give benefits only to LPs.

e.g. the idea to drop to the DAO and let it stake might be workable, if we then figure out a fair way to distribute these rewards back to the holders.

on the other hand, as in current DFX's case, projects probably want us to stake our own capital, not only the capital they dropped us. Otherwise they could've just staked it themselves.

So it needs to be structured in a way for DAO participants to be attracted to staking their own capital on top of what's dropped

which your proposal actually kinda solves with stake 1 get 1 from DAO

but it breaks the fairness of distribution of rewards

just a stream of consciousness: what if we drop to the DAO, then use dropped tokens to provide token-side of the LP, thus sparing stakers the impermanent loss on token/stable pairs. Stakers get half the yield at no IL risk and yield on tokens then distributed to all holders?

this way projects get at least double the LP on what they dropped, stakers get "riskless" yield and holders get passive rewards purely based on the success of the dropped tokens.

idk if that would make LOBS a security or something.

also idk how to technically implement "stake stable side get token side from DAO".

(stable in token/stable pair might actually be ETH or anything else cheaply hedgeable, just not the new token)

[kkkrackpot]

An idea worth considering, imo. Idk if it can be implemented, technically.

Also what about IL? Too smal brain, I'd like to see more explanation of this from experienced degens. Afaik, either the DAO gets less tokens and the stakers get more stables, or the DAO gets more and the stakers less. The latter means the stakers pay stables to someone and the DAO accumulates plunging tokens. Is it Ok? Or I'm missing something?

[nullbitx8]

1. Why don't we just start with doing single-sided staking?

Generally projects do airdrops as a form of marketing, and they expect some of the airdrop to be sell pressure. Projects will typically create a vault that emissions rewards for single-staking the project's token to counteract that sell pressure.

By the LobsterDao staking those airdropped tokens (single-sided), the DAO is now doing a good service. We can then choose whether to compound the rewards or give the rewards to LOBS holders.

And perhaps we can agree with the project that's doing the airdrop that the airdropped tokens wouldn't be distributed to LOBS holders until a certain time (vested). Or maybe they're streamed over time.

2. Then we can have another more advanced issue/discussion/development for LOBS holders that want to provide liquidity. Rewards for providing liquidity probably shouldn't be given to all LOBS holders, just the ones that actually provide liquidity. This way they benefit from the 50% discount that comes from tokens being airdropped to the DAO, and are incentivized to provide liquidity through the DAO rather than individually.

[kkkrackpot]

Why don't we

The problem is that not every project has token staking. It's an opt feature which can or can not be implemented.

Otherwise, if staking is available -- the DAO should definitely go for it (i.e. when an airdrop was to DAO itself and not to members). Profit distribution, exit strategy, etc. is subject for discussion, both within the DAO and outside with the project. If an airdrop was to the members individually -- anyone is free to do what he wants. We should avoid individual binding agreements (i.e. "everyone must stake...", etc.)

[slackerzzz]

Vested air drops is a great idea to retain loyalty