In this case, it wouldn’t be emissions of the SUNDAE token, so it wouldn’t be inflation. It would be ADA, distributed from protocol fees.
The exact percentage doesn’t matter to getting it “on its feet”; what we need is people like yourself participating in the discussion, making specific proposals, and discussing the tradeoffs 
Ah understood, so basically if it come from protocol fees in ada, could it then be sold to Sundae then distributed to stakers of the Sundae token at a reasonable and conservative APY that fluctuated depending on the price of each token?
Could we create a staking page on the Sundae site? And allow a portion of the fees from trades in ada be collected there and rewarded to stakers?
I may be shooting a little ahead here but we could also mirror something similar to vxCRV, so vxSUNDAE that is given to stakers which can then be restaked with tokens from (liquid ada protocol)
Personally I’d advocate against swapping the protocol fees directly into SUNDAE; There’s no particular reason to, and it just introduces inefficiencies from the slippage.
If the recipients want to use that ADA to buy SUNDAE, let them make that decision.
That being said, it’s ultimately not my decision to make.
Would creating vxSUNDAE as a direct swap for staking Sundae on the dapp adress the slippage or inefficiency that could arise, or would that be just kicking the can down the road.
It would be good to have that ada from staking just accrue, then when people unstake their vxSUNDAE it then sell that ada and you back your original SUNDAE + accrued ADA that is sold to Sundae upon unstaking.
If vxSUNDAE had an unbonding period of say 2 days could this also help the splippage and inefficiencies because SundaeADA could be bought in small amounts per few blocks?
I’m not sure, I haven’t thought it through. For that reason, I’d suggest starting simple and just distribute the ADA to people.
If you wanted to make this a more comprehensive proposal, and talk through exactly step by step how it would work, how everything would be calculated, what the likely impacts / benefits / risks are, etc., I think that would be very welcome though! I’m not trying to discourage you from participating haha
I like the simplicity of distributing ADA but end of the day Sundae holders believe in the dex and want to see it thrive not just in price but in use case.
If there was a way the accrued ADA showed as a fluctuating APY on the vxSUNDAE unstake tab as SUNDAE (not ada) it could incentivise and promote further use of staked and liquid staked sundae.
So technically its ada distributed to people until they unstake then the unbonding period slowly buys sundae from market
And i dont feel youre discouraging, if anything picking your brain is very helpful. How could we go about a more comprehensive proposal?
It’s not a goal of Sundae Labs to incentivize use of the token itself, beyond it’s role as a utility token for the governance of the DAO.
The token is valuable in that context, and in-so-far as it helps promote a robust and healthy governance of the protocol, adding utility to the token is fine.
But creating mechanisms to try to game “further use of staked and liquid staked sundae” isn’t really productive, in our view. We want to create incentives that promote usage and growth of the sundae protocol as a whole, not just the token. I’m not seeing how the vxSUNDAE proposal achieves that directly.
A more comprehensive proposal would be… just a detailed step by step description of how it would work. I don’t know how to explain it any more than that 
Maybe look at the original yield farming proposal for an example:
The use of vxSUNDAE could very well compliment the value the token is for its governance to the DAO, we could have essentially have the cake and eat it too?
Locked up SUNDAE can be used for governance whereas the vxSUNDAE being liquid could be used outside of the protocol
I would argue having the fees collected in ada and distributed to stakers would not be as effective as recieving a liquid staked version of vxSundae that accrues in Sundae token (not ada) would be better for the growth of the ecosystem.
I understand the token is serving its purpose as a DAO and the point of this thread is to discuss what to do with fees. But if we could incentive growth even in a simple APY for Sundae token for holders it will drive growth and use. I may be adding to much of a complex layer for a dex token but going forward if a derivative of the token can be used outside the protocol - while still being used for dao - its a win win for Labs and holders
You’re just asserting that it wouldn’t be as effective with no evidence. I’d like to see an argument for why it is more effective.
We can either simply
-have fees from this proposal go to staked SUNDAE holders as ADA, which the SUNDAE is locked, or
The difference as to why its more effective is that one is locked and the other latter is liquid to further promote the protocol in the wider ada ecosystem.
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
I would suggest to support the devs and scoopers, primarily focusing on covering their costs. If accumulated ADA is not enough, distributing the amount in the ratio respective to costs of each side. If we get enough and more, distribute the remaining ADA across LPs according to volume traded (including non ADA pairs). This would support those that generate the rewors in the first place - LP providers in active pools.
I would avoid focusing on YF, Sundae token holder incentive or reserves. Perhaps reserves later on, but I am missing clear motivation to do that now.