Following the passing of the token migration and distribution proposal (BIP-14) we need to vote on how we want our voting escrow system to be configured.
Decisions that need to be made:
-BAOv2 initial supply and emissions function to determine overtime how much supply will be created
-Max Lock time for veBAO holders (currently 4 years)
-Max Boost for LPs getting BAO emissions from gauges (currently 2.5x)
-Liquidity Gauge weightings for starting gauges determined in BIP-14
Current emissions function for BAOv2 token
In the graph above, at time = 0 years, we will start with an initial supply based on the total BAOv2 supply number we get from the token migration/distribution (this number will be roughly 1.1 Billion to 1.5 Billion BAOv2 tokens based on when we end BAOv1 farms after BIP-14 goes through governance). As time moves forward beyond the starting point of the new token, each year the slope will reduce the supply emissions rate by 2^(¼) based on current emissions function. This means overtime less and less BAOv2 supply emissions will be given out to LPs staked in gauges as it is with curve finance’s model.
-Initial Supply of BAOv2 =
(total locked BAOv1 tokens across main-net and xDAI) / 1000 +
(all circulating BAOv1 across main-net and xDAI) / 1000
-Pre Mine: (given the initial supply, what percentage of the total supply as time heads to 999 years should we allocate to the initial supply of BAOv2 tokens)
Pre Mine will be determined by the INITIAL RATE
Reference to veCRV: Curve Finance gave 43% of all the CRV tokens that will ever be minted to the initial supply of the token. This left 57% of the supply to be minted over time to the LP tokens staked in their liquidity gauges which is still happening currently as veCRV/the curve emissions process continues to their CRV token’s theoretical maximum supply.
Max Lock time for veBAO
-The proposed max lock time is 4 years. That is how the contracts are currently configured.
Max LP Boost (currently 2.5x)
-The proposed max LP boost is set to 2.5x. That is how the contracts are currently configured.
Liquidity gauge weightings for the starting gauges voted upon in BIP-14
-baoUSD/3CRV Curve LP (highest gauge weight)
-bSTBL/DAI Curve LP (second highest gauge weight)
-BAOv2/ETH UNI LP (third highest gauge weighting)
-The more baoUSD is used, the more revenue/profits the protocol generates, so having liquidity for baoUSD at the highest makes the most sense for profits.
-bSTBL will be used as collateral in Bao-Markets to take out loans in baoUSD. Everytime a liquidation event occurs we need ample incentive for liquidation bots to make a swap back to DAI profitably, so incentivizing liquidity around the basket is also necessary to make running liquidation strategies to keep our lending market healthy easier.
-BAO/ETH liquidity is necessary to keep our governance token liquid. Historically the most used pool for swaps in and out of BAO has been to ETH so that is the pool proposed to incentivize.
Multi-Sig operations for veBAO and fee distribution process:
-Set all emergency returns and admin actions for contracts across the veBAO governance system to the DAO multi-sig