Beginning on Dec. 6, 2021, vested BAO will be unlocked linearly over a 3-year period. Currently, the primary use case for generating yield from the BAO token is through a double-sided LP pool with BAO/token. However, this LP yield option has a risk of impermanent loss that may discourage some BAO holders from participating.
To explore options that provide long-term value accrual and price stability to the BAO token by distributing BAO revenue streams (trading & withdrawal fees, franchise fees, minting/buying/selling synthetic assets, and future protocol fees on new BAO ecosystem products):
Single-sided BAO staking pool
50% of all revenue streams are paid as rewards to pool
A “BAO Boost” could be added for stakers willing to pre-commit to a longer staking lockup period (like Curve lockup periods). BAO boost rewards could be paid with Treasury funds, adjusting the BAO emissions and redirecting a portion of BAO rewards, or allocating an additional % of protocol revenue.
Single-sided BAO staking will provide an alternative for BAO holders to generate yield without impermanent loss risks.
To provide yield for unlocked BAO and incentivize long-term lockups that will reduce the circulating supply and provide price support of the token.
Offer an alternative option for BAO utility & yield generation should the synthetic assets launch not be delivered by December 2021.
- Future proposals for generating yield and “sticky” BAO hodlers could be implemented by providing an “xBAO” token in exchange for single-sided staking of BAO (similar to xSushi token model). Long-term BAO hodlers would receive the benefit of getting extra yield via BAO boost, then utilizing the xBAO into a double-sided LP pool for additional yield, posting as collateral, and other money-lego use cases as BAO is integrated into various DeFi platforms over time.