I will apologise in advance for this post being a little disorganised and incomplete. Just wanted to get something up to get the conversation going…
For reference this proposal started as play on Camelot’s ecosystem grant proposal here:
BLOTR protocol has launched sCANTO on Velocimeter using oBLOTR as LM/bribe incentives.
These options allow BLOTR Protocol to raise funds that have already been used to cover validator slashing costs.
We (Velocimeter / BLOTR Protocol) believe options tokens as LM rewards are a more dynamic efficient way to incentivise liquidity and fund growth initiatives such as contributor programs.
These options serve as incentive tokens but have a built in fundraising mechanism which can be configured to support multiple use cases such as:
-Covering IL / adding additional incentives for farmers (see examples below)
-Building treasury / fundraising
The underlaying funds are essentially reuseable due to the nature of dynamic options execution pricing for example in a particular campaign where redemption discount is 50% paid in Canto 50% of the underlaying Canto will be recouped.
Campaigns can utilise dynamic pricing which will result in the exact amount to be recouped being unknowable from the outset.
The Options Contract & FLOW Maxxing gauge we have developed which has the ability to process options execution with dynamic discounts based on the users choice as to what happens next.
Users who excercise to sell pay ~75% of the market value of the underlaying token.
Users who excercise to LP pay anywhere between 20% to 60% of the market value of the underlaying token based on commiting to an LP lock duration.
The use of the funds raised at the time of options execution is total flexible. In the case of the above example 90% is sent as USDC rewards to stakers in the gauge and 10% to treasury.
But this is configurable using Velocimeter Pro.
For example a protocol may be granted 10,000 Canto as the underlaying reward token.
10,000 owCANTO is then minted.
NOTE is set as the payment token.
The TWAP oracle (a velocimeter pair) is set to csrCANTO-GOV_TOKEN (for example)
The discounts for selling directly and min max LP duration are set by the partner protocol according to their goals/needs.
Funds raised are directed 50% to gauge as NOTE and 50% to treasury to fund initiatives.
Options redemption interface for BLOTR Protocol (in Velocimeter Pro protocols have the option for the interface to be inside of Velocimeter or may build their own custom redemption interface).
(cant add multiple images as new user rn)
Options interface for oFLOW (core reward token of the protocol is an oTOKEN as well).
Note: Velocimeter v3.1 is rolling out on canto in July including the first fully functional version of Velocimeter Pro.
Wait, exactly how would the 1000,000 Canto be used?
500,000 Velocimeter Pro.
Velocimeter team would work with other protocols interested in adopting Velocimeter Pro and grant a budget to them on a case by case basis.
Velocimeter may also use up to 25% of the owCANTO for incentives on FLOW-sCANTO pool.
500,000 BLOTR Protocol
BLOTR protocol would mint 500,000 owCANTO to use as incentives on Velocimeter Pro. The exact structure of that campaign and the use of the funds raised would be to continue being able to fund any potential slashing events + covering legal costs in DAO setup.
The cool thing about using owCANTO (option to buy wrapped CANTO) is that only a % of the underlaying wCANTO is actually going to hit the market based on the actions the user exercising the options chooses to take with their wCANTO. Mercenary farmers will be paying much more to excercise than those who choose to excercise to an LP position with a lock duration for example.
This means less sell pressure on Canto. And max efficiency and value provided to Velocimeter, our ecosystem partners and the wider Canto ecosystem.
Thats cool and everything but show me da code?
Will post actual link once I am able to add multiple links
Options contract (v2 with zapp to LP zapp to veFLOW)
Updated version of Velocimeter Gauge that accepts dynamic lock times sent from the Options contract:
Note: Neither are formally audited currently. We also have a bunch of frontend code that makes this all work in our UI and a bunch more to write. Contributers may be happy to hear that they could also be paid in oTOKENs to help get this all working seamlessly in our UI
Thanks for reading everyone. Looking forward to hearing your feedback!!