BIP 9: Parameterize and create a DAO infrastructure around lp sett reward/reinvestment ratios

Name BIP 9: Parameterize and create a DAO infrastructure around LP sett reward/reinvestment ratios.

category: Sett Vault
High Level: Allow DAO to adjust reward/reinvestment ratio from 50/50 in order to better support token price, meet market conditions, and learn how to govern ratios.

Right now the Uni Badger/BTC vault, and soon a number of new vaults are setup to direct 50% of emissions through the geyser/Badgertree for earnings and the other 50% are used to buy more of the underlying position. This means that 25% of emissions to each LP are being sold and market price for WBTC(or whatever the other pair may be).

The goal of the reinvestment is to continue to increase liquidity. The goal of the rewards is to incentivise long-term investment through rewards multipliers.

When market conditions are good, a 50/50 ratio may make sense here. With bitcoin mooning and badger down, it seems to me like this creates downward price pressure nor is it a good investment, and it would make a lot more sense to maybe direct 80% of the emissions to rewards and only 20 to LP reinvestment, but I’m no expert. This becomes more pronounced as we add more lps that all have emissions that are being used for reinvestment.

Answering a question such as a simple ratio can be a complex thing for a group of people to do. A successful DAO learns how to do this. Uniswap is a good example of what happens when a DAO gets too big before learning how to make more complex decisions in a collaborative way.

I suggest that we vote to form a committee who will discuss/study this and create BIP’s suggesting changes when sensible. The committee should consist of 3 people, each of whom should be elected by a BIP. For now, committee members should hold their place until they resign, or someone proposes a new BIP with a sufficient quorum to replace them and wins. Each committee member should be paid 75 badger per month.

So there are 2 questions here:

Should we let the 50/50 split between emissions float based on some factor?
  • Yes
  • No

0 voters

Do we want to build a governance structure around something that isn’t the most important thing as a way to learn how to do it, or do you have other ideas how to better handle this?
  • Yes
  • No

0 voters

Once basic sentiment and interest is determined, I will add a few more polls about specific parameters and details.

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Seems reasonable for this to be in community control. Although an easier, more free market approach would be to create multiple setts.

  1. Badger 100% rewards
  2. 25/75 Badger/reinvestment
  3. 50/50 Badger/reinvestment

All would go in the same pool but the smart contract would manage the reallocation


Poll 2 doesn’t seem to work.

This is an interesting point. If it is possible to alter this then i suggest a more dynamic approach.
Instead of outright converting 20% and freeing 80% like you are proposing why not model the ratio to be dependent on the price movement of both assets involved but biased towards badger. hold more badger when badger price is low and vice versa.

Having said this i doubt if what you are describing has that much effect on price anyway. I mean the process is algorithmically constant and has a steady effect on price, it dances to the tune of what the market already is regardless of what direction the market is headed. besides emissions aren’t that much and they are gradual plus only a fraction of it is swapped for the other asset. And from what i understand it still buys back the badger when you withdraw.
Anyway i aint no developer so what do i know.

I agree that this should be dynamic. the question is how to decide what to set it to.

The two options are have a group of people decide and vote on it
Build some code to decide and vote on that

I kind of think it makes sense to have a group of people decide, and if they end up discovering that the best way to do this is via code, not human decisions, and figure out what that code is, then we can use it.

Also fixed the second poll.

idk about the committee of 3 part, there is a lot of people here… but as long as the sett/staking is profitable that’s all i really care about.

to me it seems like we should always be open to re-evaluating for optimization which may mean updating the flow of Badgertree. however it seems that all hands are on deck for preparing the sushi $wbtc/$badger vault and also working on $digg. i believe this discussion about most effective distribution of emissions is valuable but i don’t know if now is the time to pursue this

I think that makes sense

if this is easy to parameterize quickly then it makes sense to do now, if not I agree it’s not a huge priority, although with each new LP comes even more badger being autosold.

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Pool 2 has now been fixed. sorry about that.

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I would like to see data that suggests that the 50/50 split has a significant impact.

Today it happens on average once a day and that pool currently only receives about 15k Badger per day. So if you extrapolate thats only about 3750 Badger sold into the market which is under $25k into a liquidity pool of $8m.

Personally I don’t think it has an impact and even if it did changing to 80/20 wouldn’t change much outside of more work and new vulnerability factors.


15k badger per day at 7 bucks a share is 105k. Uniswap currently shows a 24 hour trading volume of just over 1 million. So that means 10% of all badger trades today were us selling badger for bitcoin to redeposit. As we add more LP’s (2x sushi + 3-5 more digg) that are all doing the same thing, this 15k number will rise a lot too.

I’m still learning SC development, so I can’t really comment intelligently as to how much risk/work it creates to do this. It’s certainly not a huge deal right now and can wait, until some other priorities are finished.

So 25% of the total emissions badger that goes into a lp pool is swapped for the other side.
The badger is never rebought. When you withdraw you just get your unilp tokens that have wbtc and badger.
I am unaware of any situation where badger is buying badger tokens to create an upward price momentum. I also think it’s a bit early in the game to be thinking about this.

I generally think we just need to be a little bit careful about how much badger we emit, and what actions we take to stop it all from just getting dumped. Not doing it ourselves when the coin price is down seems like a good start, although I’m also not a dev and it may be more trouble than it’s worth.

Failed to reach quorum.