Hi everyone,
I know absolutely nothing on managing a protocol. But it is a pitty this discussion is dying out, so here are my thoughts, they very well could be dumb as hell, but I guess if everyone share his maybe we could end up with something. So for what it is worth:
First I agree with Pi that the most important is to pay the scoopers, I am sure they are all very nice and generous people but they are running a business that has to be profitable in order to keep running. Additionnaly, Sundae Labs is at minimum our R&D, they too are probably charming and generous but money is needed for things to run. I think there is no way around (nor would I like there to be, to be honest) to at least pay for their infrastructure.
By using Pi’s number that makes a minimum of 41000 ADA a month. Of course as we do not know future price of ADA it makes it a bit hard to assess what that will represent later on. But I will keep these numbers for at least the sake of the argument, and as they are represented as minimums I would add extra 10% (you know inflation and all…) to be on the safe side. Plus if ADA goes up in value it is only normal they profit from it, so counting in ADA at least for now seems ok.
This would make a 45100 ADA minimum to first be distributed to scoopers and Sundae Lab. I will keep Pi’s number and lets say we divide it with 80% for scoopers and 20% for Sundae Labs to whom I will globaly refer to as infrastructure.
There are two primary source of revenue, the fees and the ADA staking rewards for ADA-XYZ pools. To me not redistributing the ADA staking rewards to the liquidity providers simply is an absolute no. While all fees can be distributed to infrastructure until there is more than the 45100 ADA monthly.
As it is totally possible we do not reach these numbers monthly at least at begining, I would propose we first need to reach this amount as averaged on all passed month +1 before we use the extra ADA for anything else. For exemple if first month post V3 fee revenue is 10 000ADA all goes to infrastructure, second month is 20 000 all goes to infrastructure, 3rd month 40 000 ADA all goes to infrastructure, 4th month 80 000 all goes to infrastructure, 5th month 80 000 all goes to infrastructure; at this moment we average 46000 per month so the following month if there are enough ADA from fees we pay the infrastructure to make an average of 45100 per month and the rest we can do something else with it.
So what to do with them ?
I know many wants them to be rewards in some way to the Sundae token holder. As much as I think this would be fair. I also think there is a need for treasury, so maybe we could divide the remaining ADA with a % for the community funds and a % directed to Sundae token holder. I just have no idea what would be a good divide nor if it should be static. Maybe we could make a 80% treasury 20% token holder until we reach a certain amount in the treasury.
How would we distribute the ADA to the Sundae holder ? I would very much like to see it used as an incentive to vote cleverly on pools to get rewarded.
There could be a fixed % that is simply added to the Sundae - ADA pool, in form of a zap. For the remaining we could maybe (the idea is not mine, but I like it) distribute the ADA according to votes. I will just copy what was discussed in Discord below :
"Perhaps an incentive program for SUNDAE, where a portion of the ADA rewards is paid to SUNDAE delegators would help attract more intelligent delegation. For example, one such scheme could say:
Each day, record the total volume of each pool:
Calculate a weighted sum of delegation from the previous 5 days (i.e. if I delegated 1m SUNDAE to that pool for 4 out of the 5 previous days, my weight is 800k SUNDAE)
Sum up everyones weight each month
Distribute X% of the ADA collected as protocol fees among SUNDAE stakers in proportion to their weight
This would align incentives for SUNDAE delegators to try to generate high volume on the DEX by delegating to strategically important pools.
it’s on a time delay, so that it becomes intentional.
Or perhaps volume / emissions, so that people win when they generate the highest volume with the lowest rewards, that would encourage people not to dogpile on a single pool."
I am aware I am not adding much to the discussion here, my main objective is more to have people engage on the matter rather than have people rejoin my opinion.
I know many people do not feel like sharing their thoughts because we are not skilled on the matter. But maybe we could reach some sort of inteligence of the crowd if we actually start sharing our thoughts. At least now there is already a complete idiot who shared his so do not worry you will not look more ridiculous.
I wish you all a good day / evening