Background
On April 8th 2022, Nation3 was born as a movement towards a peaceful future of interconnected communities: cloud countries and crypto cities powered by the Web3 stack.
To mark its birth, today 2150 $NATION have been distributed in a tweetdrop to 2150 addresses. Today, these 2150 members constitute the core of the Nation3 community, and some of them will become Genesis Citizens and receive the first ever Nation3 passports, granting them the right to govern the cloud nation in its bicameral system.
Proposal
To continue building the momentum for Nation3 and drive its growth, I’d like to propose a liquidity mining program for the NATION / ETH Balancer pool. I believe that a well designed incentives program will achieve the following objectives:
- boost liquidity provision in the early days of the project, therefore removing friction for early participants from purchasing $NATION
- by extension, allow a larger number of participants to lock their $NATION in exchange for $veNATION, turning them into long-term incentivised community members and governance participants
- through $veNATION, provide access to Genesis NFT Passports, defining the community of very first Nation3 Citizens and active governance members
- allow the possibility of the decentralized, bicameral governance system
- support the ecosystem growth over the long-term
Additionally, to reward and incentivize the long-term alignment with the DAO, I propose to introduce boosted incentives for $veNATION holders. As successfully implemented by Balancer (veBAL) and Curve (veCRV), among other projects, boosted rewards encourage participants to lock their $NATION for the longest time period, which in turn ensures:
- an incentive for $NATION to be taken out of circulation due to the holders’ long-term commitment, creating a sink that might serve for $NATION to accrue value
- economic alignment of the DAO’s governance members towards long-term success of the project
Specifications
Liquidity Pool
The proposed incentive program would apply to the only currently existing NATION / ETH Balancer pool with an 80 / 20 ratio.
Budget
I propose the program to start with an initial budget of 900 NATION, to be allocated as liquidity incentives across 3 months. Should the impact of this first incentive program be as desired, governance can choose to propose another vote to extend the program.
Performance scenarios
Five scenarios that might transpire over the course of the liquidity rewards program are modeled out below:
In the conservative scenario where 2500 NATION and 52 ETH are supplied to the liquidity pool (totalling in $781,250 in liquidity), the incentive program would generate Liquidity Providers (LPs) a 115% APY, which is highly competitive in today’s market conditions.
In the scenario where the liquidity pool reaches $25m, the APY would still remain significant at 72%.
$veNATION boost
On top of the liquidity incentives proposed above, the $veNATION holders would be able to boost their $NATION rewards by a factor of 2.5, effectively reducing slightly the rewards from non-$veNATION holders.
Conclusion
This proposal puts forward a liquidity incentives program that is essential at the early days of the project to capitalize on the launch momentum and drive its growth. A total of 900 $NATION is proposed as the optimal initial budget to be allocated as rewards over 3 months, with the possibility of extending the program with a new governance vote. $veNATION holders would receive a 2.5x boost to their rewards, diluting non-$veNATION holders in their rewards.
Which budget should be allocated for the liquidity rewards program?
- 500
- 750
- 900
0 voters