[DAO Discussion] Avalanche Liquid Staking Proposal 🔺

[j_rana]

@0xWicked

@j_rana, in regards to security are u planning to launch a bug bounty? Since you wont be launching a token, will the bounty be funded by the grant? What about security audits, will the grant include these as well?

@Shrop_99_Degen

Are there any additional fees/expenses that we would need to cover or does the revenue share cover any of that?

Two similar (and excellent) questions, so I hope you’ll forgive me answering them together!

Yes, security audits and bug bounties will both be covered directly out of the grant, not as an additional cost to Wonderland.

Similarly, the costs associated with setting up secure custodying of staked assets will also be covered out of the initial grant.

@NalX

Ultimately, if the break clause is fair, I don’t have an issue with the 4 year term. We either succeed together or fail together.

This is exactly how we view it too – we’re in this together

@NalX

Stakers get 90%
Wonderland 7.5%
Team 2.5%

Great summary! I suspect I made my math a little convoluted in the original proposal, apologies for anyone who found this confusing.

@ThunderDuck

The payment should only be in TIME, this way the team has incentive to make Wonderland better as it correlated with their income

Fully agreed on aligning incentives. We’re already big TIME (and SPELL) holders – this is one of the reasons we suggested this as an option on the original proposal.

@Skrilla

So basically your saying your not willing to negotiate on the numbers? I don’t know how well this will go over.

The one thing you have changed my mind on this post is the length of the contract. I thought 4 years is to long but since reading this post I have changed my mind. 4 years makes sense now.

On the contrary! Agreeing a mutually beneficial deal is exactly why we shared this as a proposal for the community’s consideration.

I’m genuinely blown away by the calibre of discourse here. Regardless of outcome, I couldn’t be prouder to be part of the Frog Nation

[mikebcity]

We have no guarantee that we’ll even capture 5%. Seems like there’s a lot of moving parts and the risk reward sounds awfully expensive. It’s a no for me flog.

[UggItsThisGuy]

I’m pretty much in agreement with most of the people here.

1. I agree the concept sounds awesome.

2. I don’t have an issue with 75/25 as long as they are performing. I’d like to see a payment structure more closely tied to performance. It’s done in every industry in the world, no reason it can’t be done here.

3. I’m not in love with the 4 year term to start. I think a 1 year agreement with 3 extensions would make more sense.

4. I’d like to see a termination clause worked in that would void or at least reduce the 15% for perpetuity if they fail to meet agreed upon benchmarks of growth.

5. As this grows and 4-5 years is past, are we getting a discount on a re-negotiation of terms to manage this partnership, or is it understood that the Wonderland team will be taking over at that point. If Wonderland is taking over, does that impact the 15% moving forward from that point on?

6. I believe the payout should be in staked TIME and I don’t believe it should be paid out up-front. I can see something along the lines of $1MM TIME up front, $1MM at delivery, $2MM TIME at 10% growth, $2MM TIME at 25% growth, and $3MM TIME at 50% growth.

7. I don’t really care who the team is if Dani and Sifu vouch for them. I do believe there should be an out on whatever contract is signed if they fail to perform.

[Skrilla]

Well then I think if you are willing to negotiate some aspects of the proposal then you will have my full support going forward.

Frog Nation

[asosao_2416]

Thanks @j_rana

Can you give us some insight as to why $6 million MIM or $9 million $TIME?

[Mr_Maddness]

This is a brilliant response and more frogs need to look at this proposal with the same lens.

One major problem with this proposal is the 4 years investment time. I’m a hard “No” until this is reevaluated. 1yr preferably, 1.5yrs max.

The second problem is a lack of KYC. I have no idea what your track records are like or how good your team is.

LNFG

[MMD]

And the assumption is that we would be able to attract about 5% of AVAX (~1.25 Billion $$) stakers on this platform thus generating 12.5 million a year and this 12.5 mil is split 3:1 with wonderland and the TEAM (external dev team) and the best case scenario is that we would be able to attract 20% of AVAX stakers (~5 Billion $$) thus generating an income of 50 mil (split 3:1)…All this for an investment of 6 mil

Note: Currently staked AVAX is 62%

The basic question is,
Will the stakers of AVAX find value in “giving up” 10% of their annual revenue for getting a flexibility to unstake anytime?

Hint: This is like an insurance product that will give the stakers an ability to exit position if there is a big dump

[0xPayton]

This is a much better explanation. You should edit the post to include this so your proposal can win.

[The-owl]

I like the proposal and believe it should carry to the next stage perhaps refine the explaination a bit and include an estimated room time frame as everything after is pure profit

[ORGUY]

I LIKE IT but…

Just pay them “a million or two” more upfront or “in slices” but reduce the % they will receive.
If they are good as they say, Wonderland will recover those extra million in a blink of an eye.
They will still make loads of money and we get an even better deal for all of us at Wonderland (don’t forget they win both ways since they also are $Time stakers… it is a WIN-WIN for them no matter what).

Plus add some break clauses that ACTUALLY protects us, something like…
“Wonderland DAO can stop this deal at any time without any penalty fee as long as it gives a 3 months notice before the date intended to stop”
and…
“Wonderland DAO to receive a minimum of 12.5M at the end of 1st year, otherwise we can rightfuly cancel/stop the contract and you will be liable to pay Wonderland a compensation of XXX amount”.
(sorry I’m not a lawyer, but I guess you get my idea).
and you guys will probably come up with some others break clause!!

But over all I am happy to see Wonderland evolving in a positive way!
Cant wait to see where we will be in a year time

[MMD]

One the proposed platform, Who will be making the markets (underwriting) these AVAX-STAKE? by that what I want to ask is

In the intial stages till this platform is subscribed by a large number of AVAX-STAKERS (say $5 Billion), In the event of a big dump in the market, who would be the BUYER’s of the STAKED-AVAX when the subscribers to this platform want to exit their position (get themselves unstaked)?
or
is it that the understanding that the depth of STAKED-AVAX market will be good enough to absorb large dumps without much slippage?

[Corum]

And here I thought that there were no lions or sheep, but only frogs… How mistaken I was!

[Corum]

Thank you for taking the $TIME to summarize all of this, appreciated!

[Corum]

Should it not be “KYD” here?

[j_rana]

@MMD

is it that the understanding that the depth of STAKED-AVAX market will be good enough to absorb large dumps without much slippage?

Great question – and that’s exactly right. What you’re describing (the value of stAVAX falling relative to AVAX) effectively represents a huge (and delta-neutral) time-based arbitrage opportunity for large AVAX holders.

Large / long-term AVAX holders (such as 3AC, and potentially Wonderland itself) would benefit from these, and such arbitrage should easily absorb these fluctuations.

Even in other markets where the staked asset is itself illiquid (e.g. ETH2 staking) we see the peg remains robust. With Avalanche staking, the smallest period before unstaking is only two weeks, which is short enough that we don’t anticipate any liquidity issues.

[Randy]

How is this good when they could stake a stable coin for 20 percent and not worry about volatility of avax? That’d bring in more money than the 7 percent staking of avax and wouldn’t haven’t to give a cut to them. Just doesn’t seem like a good idea when you can double that safely with a stable coin

[Mambo]

Very interesting proposal. thank you for submitting. My comments below:
-please provide more info on the team, including track record and who they know/are working with at Ava Labs. Any Ava Lab references would be very helpful here.
-4 years too long. suggest rolling 12 month terms with renewals based on certain agreed KPIs/milestones being met
-75/25 split low for frogs. suggest 85/15 from the outset
-Personally prefer the $6mm (50% upfront/50% upon delivery) option, however need to be satisfied $6mm is not too high
-suggest identifying key personnel in their team and incorporating “key man” provisions
-confirm/articulate any synergies that may exist with other projects in our ecosystem (abra/popsicle/sushi). i.e. how does this proposal feed into our ecosystem?
-overall, the returns of this proposal should be compared to returns that the treasury is currently generating to ensure this is higher.

Many thanks

[MMD]

There is no staking on AVAX in this…This proposal is to create a platform where staked AVAX can be traded (for the lack of a better word) thus providing liquidity for AVAX stakers. Currently AVAX stakers have to be locked for a minimum period of 2 weeks (there are longer stakes as well)…
By creating a platform for AVAX stakers, this proposal aims to provide liquidity to the staked avax holders for a fee (10% of the AVAX staking rewards taht is currently at 9.8% annual)…The platform (Wonderland owned) will provide the market place for the staked AVAX for 1% (approx) fee…The external dev team that will develop and maintain the platform will take 0.25% (for first 4 years, 0.15% after that) as their service charge…

The cost of developing this platform will be about $6 mil…returns on this platform (assuming we are able to get $5 billion staked avax interested) is about $9 mil annual…

Note: 62% of AVAX are staked

So the right question to ask would be,
Will 5% of AVAX stakers like the idea of giving 10% of their return for the benefit of having the possibility to UNSTAKE ANYTIME without any staking period?

It’s like a property insurance, we pay the premium for some coverage.

[UggItsThisGuy]

You bring up a good point.

@MMD

The cost of developing this platform will be about $6 mil

I’m curious how long it would take to create this platform, and when does the contract start paying out?

[sirius136]

I want to provide my thoughts,

First, we must realize that $6 million is only 0.75% of Wonderland’s treasury.
Using this ratio to exchange 1.5% of revenue ($12.5 million), and have the opportunity to expand to other chains, this is an excellent opportunity.

Yes, for every little frog, this is a lot of money, but for a frog nation, there is really nothing.

The second point is that some people are very skeptical about being on the anonymous team. This is indeed a problem. We gathered here because of daniele, so naturally we disagree with anonymity.
But the anonymous team will be the main operation of defi in the future, which is full of business opportunities and fraud. Fortunately, we have Daniele and Sifu have already done pre-trial against each other,
So anonymity is only relative to us.

If the other team is willing to disclose more, can gain more trust, but I personally feel that this is not necessary. Because I am also setting up DAO myself, everyone is almost anonymous, but this does not hinder the operation of the project.

The third point, although the 75/25 ratio may be dissatisfied, I am more concerned about how big reward it can be in the future. The 75/25 distribution of 0 profit is meaningless. The 75/25 profit of 1B is far better than the 95/5 profit of 1M, appropriate incentives for both sides, contributes to a better future.

The fourth point is that the four-year buyout contract is indeed too long. I would recommend a review every year. The review will automatically renew unless the quorum is over 4% and the number of objectors is greater than 85%, and the direct performance of the contract for 4 years should be retained. possible.
Although I believe in Daniele and Sifu, people will change. Therefore, to provide a more stringent way of relief, I think it is also a kind of vigilance for both parties.