Accelerated Polly Tokenomics Proposal

Purpose

The purpose of this proposal is to agree the tokenomics for the upcoming franchise on Polygon. It will be an accelerated proposal lasting 1 day in concepts, 2 days in governance proposals then going to snapshot so it can be approved by the community before the launch of farming.

We’ve learned a lot from our previous Bao and Panda launches. Using the insights from those deployments, we would like to propose the following tokenomic mechanics for Polly.

Supply

Polly will have a Max total supply of 25B tokens. There will be no pre-minted tokens, thus preventing a major price discovery of the governance token prior to the launch of its distribution. At the end of the farming and vesting period 12.5B tokens will have been distributed, allowing for future incentive programmes beyond the 6 years already planned.

For every 1 token minted through farming an additional 0.5 tokens will be minted and distributed accordingly (or ⅓ of the supply). These tokens will have the same lockup % and period as farmed tokens.

  • 0.1 for development costs, which may include but is not limited to paying developer wages and bounties, covering infrastructure and operational costs related to technology or development.
  • 0.25 to BAO holders over a long period, exact details still to be confirmed, but likely via a BAO staking mechanism
  • 0.05 for a BAO community owned vault
  • 0.1 for founders - the community galaxies who made this happen.

Distribution

[edit] The below schedule is based on Polygon block times, which are not fixed. Small changes in block times multiplied every block over 6 years can add up to a fairly significant change in timelines.

The below chart shows the token distribution over time. The “treasury” portion represents the 0.5 additional tokens minted and distributed as above while the Total Polly Minted represents farmed Polly tokens and the unlocked Polly Total represents the number of unlocked tokens from farming.

Polly will have the following distribution array:

[90,80,78,76,74,72,70,68,66,64,64,64,64,64,62,60,58,56,54,52,48,41,41,38,38,36,34,32,32,32,32,32,32,32,32,32,32,32,32,32,28,28,26,24,22,20,18,18,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,16,14,14,14,14,13,13,13,13,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,12,11,11,11,11,11,10,10,10,10,10,9,9,9,9,8,8,8,8,8,8,8,7,7,6,6,6,5,5,5,4,4,4,4,3,3,2,2,2,2,2,1];

Vesting period

Polly will unlock 25% of harvested tokens to help smooth the circulation as we will launch with nDEFI already burning tokens from day 1 and other nests and products following. The remaining 75% will be locked. Those tokens will remain locked until Polygon block 34652736, approximately 1 year from the start of farming and will unlock in a linear fashion until block 113492736, roughly 6 years from the start of farming.

Any tokens earned after that start of the unlock would continue to be proportionally added to the linear distribution. Any tokens earned after the end of the distribution would be instantly unlocked.

Farming Fees

The proposed fees for Polly farms will borrow the same structure as Panda and include:

A 0.75% deposit fee.

A 99% slashing fee if a user withdraws in the same block.

A 50% slashing fee if a user withdraws under 1 hour.

A 25% slashing fee if a user withdraws under 1 day.

A 12% slashing fee if a user withdraws under 3 days.

An 8% slashing fee if a user withdraws under 5 days.

A 4% fee if the user withdraws after 5 days but before 2 weeks.

A 2% fee if the user withdraws after 2 weeks but before 4 weeks.

A 0.1% fee after 4 weeks.

The BAO community has always vouched for long term liquidity staked in the protocol and will continue to employ the same principles for Polly

Farming Pools

Farms will follow the below schedule and weightings. The relative volume for each token is predictable, based on its weighting in nDEFI. Each SLP pool will be weighted based on the tokens nDEFI weighting and the available liquidity already on SushiSwap. Tokens with already very high liquidity don’t need any incentives and ones with a high nDEFI weighting but no or minimal liquidity on Sushi will need a high pool weighting. The weightings may be changed if some tokens are suffering from larger price impact than others due to attracting less liquidity than expected.

For 3 days the only farms will be SLP pools, allowing for sufficient liquidity to be added in time for farming starting with the nDEFI token.

As agreed with the community previously we decided to have no preprint for Polly and no farming on day one. This should allow the worst of the dilution to pass before incentivizing a pool with farming rewards.

Day Pair FARM WEIGHT
0 YFI/ETH SLP 521
0 CVX/ETH SLP 1 404
0 ALPHA/ETH SLP 76
0 UNI/ETH SLP 230
0 SUSHI/ETH SLP 1 000
0 CRV/ETH SLP 256
0 BAL/ETH SLP 970
0 COMP/ETH SLP 1 284
0 MKR/ETH SLP 1 257
0 ALCX/ETH SLP 337
0 LINK/ETH SLP 110
0 SNX/ETH SLP 972
0 UMA/ETH SLP 149
0 BAO/ETH SLP 1 000
3 nDEFI 4 000
3 nDEFI/RAI 12 500
3 nDEFI/ETH 12 500
3 POLLY/ETH 10 000
3 POLLY/nDEFI 15 000
3 POLLY/RAI 10 000

Other Notes

Polly Finance shall be under the management of the Bao community which will provide it with shared efforts of advancement.

While Polly Finance is subject to its own independent governance, in this deployment Polly Finance holders will be bound by the term that they cannot split off from the Bao community for a term of at least 3 years.

5 Likes

I would like to hold off on launching for abit.

let’s do it.and we need to remove our LP for snapshot vote?

Well done guys! The proposal looks to be very well considered. LFG! 🦜

1 Like

You’ve posted this same response in two different governance threads and yet to provide any reason as to why…

2 Likes

While I appreciate that a vote will be held regarding the tokenomics of Polly, i dont believe it is at all necessary…this proposal is going to be approved no matter what (“wen polly?”, “thoon”, etc.)…people are chomping at the bit to get this launched…myself included. No one is going to vote against this.

What i do feel a little uncomfortable about is how the supply is being distibuted…namely to the “founders”.
Although 0.1 of every farmed token sounds miniscule, its actually 10% of all farmed tokens, which in my opinion is a high number for just this project (i would like to know the founder distributions for Bao, baocx and pnda is to get an idea on total compensation for all projects).

As an example, if Polly has success that matches Bao ($60 million marketcap), $6 million will go to the founders…i dont know how many people are in this founder group, but lets say 10 people…thats an average of $600,000 per person!

Is that reasonable? We all have to ask ourselves that.

** But again, i want to stress these are make-believe numbers and may not at all be anywhere near accurate. **

Before i get a lot of shade thrown my way, i DO believe that the team deserves to be compensated fairly (even over conpensated in certain situations)…for their time, diligence and especially their patience…but i believe that at least part of the compensation should be directly linked to the success/achievement of the project.

So, i would propose that the 0.1 should be broken down to 0.05 + 0.05…the first being a flat payout (“salary”) while the second being paid out when specific metrics have been met (“bonus”)…what those metrics could be: TVL, marketcap, # users…or any other metric specific to their respective galaxies.

1 Like

its not 10%, is 6.66% because the 0.5 tokens are extra. so for every 1 token farmed there is 1.5 tokens minted in total. It will also be split evenly between quite a number of people & represents a much smaller founders share than many other projects.

Personally I believe the people that made this happen are worth 6.66% of the supply, vested over many years as an incentive to help make it grow. Im not sure you caught the bit where it specifies that these tokens have the same lockup schedule as farmed ones, 25% unlocked as they are minted and the rest released over the 6 year vesting period. With this lockup in place the team will be rewarded for making the project a success with higher value tokens as they unlock.

For reference Panda Finance had a 15% founder/team share.

1 Like

Which people can look at and review to see that the Panda has never been touched from that allocation and has not been sold because it wasn’t fitting for the performance that product experienced.

The other thing people need to remember is the sheer cost of talent in this space. It’s not uncommon for top engineers to earn $250k+ as a base salary, and then another $200k - $300k/year in equity/tokens with a long vesting period.

At Bao we don’t have that kind of budget, and most of the team are passionate people many of whom have volunteered their time to make Bao a success.

I’ve already told the teams and volunteers working on the various Galaxy functions, that the ‘founders’ grant is being evenly split between everyone who worked on Polly and not just the initial project founders.

The other thing to remember is the vesting is over 6 years.

So even in your example, of $600k per person, that’d be only $100k/year if Polly is successful and continues to have the same marketcap for the next 6 years.

If Polly can achieve a strong market cap for 6 years then it will have outlasted 90% of products in which case I think its more than reasonable that the various team members deserve that compensation.

Overall, I think the % is low compared to nearly any project out there.

And if anyone disagrees, I invite them to build a community and protocol filled with passionate people on a lower team share. If they can do that Bao would be very happy to invest in them :)

10 Likes

Great response, no easy task. What could perhaps be more explained how these funds help to keep the talent or are they also going to be used to attract new talent. If it’s going to be used to hire new devs to support the protocol, it’s perhaps not enough and wonder if this is covered in the 0.1 or not.

For example, what if the market cap goes 1000x and team needs to grow 10x, how do we address it?

In general the tokenomics seem fair to me at the moment.

No greater reason then I believe that a launch time closer to unlock of bao would be better, and there isnt any evidence to back that up its just my gut.

I am happy to see value accrual back to Bao token holders. As the Bao ecosystem continues to grow and the unlock approaches, I think Bao staking is a critical component to becoming a productive DeFi token and moving beyond just governance voting rights. Great progress and thank you for all your hard work and listening to the community input!

Yee… and I would rather have the team profit more than taking less and abandon the project after a short period of time.

1 Like

The “founder” share grants will be allocated to galaxy members and volunteers who are active at the time of their unlocking.

It’s scaled just like the bonus multiplier for farming, so the first chunk is a retention reward for the galaxy members and volunteers who have put in countless hours to get to this point of launch.

Then as it moves forward its a retention bonus for active contributors and the ability to attract new ones.

Think of it this way the goal is to have a self-sustaining DAO able to hire and appoint the right galaxy members it needs.

In a classic job you have salary + stock grants that vest over time. The earlier an employee joins a startup the larger a stock grant they get until its gone.

For talent in Bao’s community the “salary” comes in the form of Bao from the treasury (either dev fund or community fund depending on the galaxy the individual works for). The DAO controls this by voting and can decide to stop it at any time. The DAO even has the right to vote me out as the head of the maintainer galaxy.

The “founder” grant is something that most teams keep to the actual founders. Instead, I’ve proposed that it is a granting tool to use since DAOs don’t have stock to give away. Instead of being for the founder it is distributed at the discretion of the founder rather than the DAO and it isn’t paid out on a rolling basis but vested for the recipient.

This gives us a powerful tool for attracting and retaining long term talent in a sustainable manner where they can know, even if they got voted out of a job tomorrow, they have some vesting tokens for the work they did.

The setup here is that normally founders get a big grant. What I’m asking the DAO to vote on is: “Instead of approving just a big grant for me, let me give it up and have it be a fund that we preapprove discretional spending from so that we can better reward talent without excess votes or large salaries

In the Bao community we experiment a lot with tokenomics and designs for how to run the HR side of a DAO. This is the next one to see how can we be more competitive for talent. Which has been our biggest struggle.

Is this the right approach? I don’t know.

But to test it instead of making the share of tokens smaller for Bao holders or the main farming rewards, I’ve proposed giving up what would normally be tokens for myself and 1-2 other people in order to try this experiment that I think will boost the quality of contributors in our ecosystem.

It’s still called a “Founders” allocation because that’s what’s common and understood but we’re using it in a way that I think is more fair.

7 Likes

Solid proposal @Chickn , I’m excited to get this going!

Also enjoyed reading both concerns and explanatory answers on this matter, thanks Bao!