Summary
As an ALD holder and customer of Clever/Concentrator products, I propose the following improvements to ALD’s tokenomics to generate additional value for ALD holders and fund further growth of the Aladdin Dao ecosystem:
Apply the Curve Gauge voting for ALD/ETH, and spend the 30% of income from Clever and Concentrator protocol for Gauge weight voting
Reduce the Staking APY from around 10% to 5%. And keep that saved 5% ALD emission as ALD ecosystem investment fund.
Enable VexALD, and Clarify the benefit of VexALD
Publish the Bi-monthly/Quarterly financial report and list all the income and expenses.
Motivation
The long-term undervaluation of ALD limits Aladdin Dao’s ability to fund new growth initiatives. I believe the proposed changes to ALD’s tokenomics structure will optimize it as an investment vehicle for the entire ecosystem. By pursuing additional income streams, making strategic investments, and improving transparency through reporting, Aladdin Dao can attract the funding and market recognition it deserves.
Detail Proposal which is open to discuss
Apply the Curve Gauge voting for ALD/ETH, and spend the 30% of income from Clever and Concentrator protocol for Gauge weight voting.
The Curve gauge voting process for the ALD/ETH pool would be similar to listing ALD on a major cryptocurrency exchange. It represents a great opportunity to attract more new interest to ALD, which I believe Aladdin Dao deserves.(https://twitter.com/taowang1/status/1616917945401356289) Using a portion of treasury income(30%) for gauge weight voting would also help improve liquidity and provide ALD holders who do not want to lock their tokens for 4 years with a positive income stream. Additionally, a new ALD/ETH vault within Concentrator could give ALD holders another yield-generating option by depositing their tokens in that vault.
Reduce the Staking APY from around 10% to 5%. And allocate the 5% ALD emission as an ALD ecosystem investment fund. The investment fund can be utilized for:
• Buying back CLEV or CTR tokens once their prices become undervalued. Newly purchased
CLEV/CTR tokens could then be permanently locked to generate passive income.
• Incubating new in-house protocols by providing more ETH funding, to accelerate their growth.
• Investing in new protocols during pre-seed or seed rounds, such as the Prisma Project.
• Building an in-house arbitrage and market making team to operate within the Aladdin ecosystem.
Enable VexALD tokens and outline their benefits, which could include:
• Free airdrops of new in-house protocol tokens as they are developed
• Investing excess revenue from Clever and Concentrator within the Aladdin ecosystem during bear markets
• Distributing dividends to VexALD holders from time to time
• Offering lending options to VexALD holders to access funds if needed
Publish bi-monthly or quarterly financial reports that break down all income and expenses in detail.
Providing transparency through regular financial reporting will build long-term trust between the team and ALD holders. Clear communication of how revenues are being generated and allocated will demonstrate proper stewardship of ALD holders’ investments.
Reason I invested in ALD and staked it, what seems ages ago now…, was that was that I liked the idea of an easy set and forget investment in crypto, let the big brains of defi handle the tough stuff for you in their own version of crypto Berkshire Hathaway, whats not to like! I was also attracted by the fact the early investers could get very high rebase +200% APY (Ha! for few days anyway…) and a sweet bonding deal(Ha!, bad timing i guess). I liked the fact that my xALD was not locked for a long periode, I could always sell them if I needed to.
I think that if the plan still is to get noobs like me to invest in ALD (and I dont know if that is the idea now) then it should be pretty simple to buy and stake ALD. Not so simle in first place, and not sure I think ve-locking xALD makes things simpler or more attractive for noobs. Why not pay revenue from CTR and CLev, dividens and so on, to xALD holders, and maybe even pay initial revs based on how long you owned your xALD? Keep the rebase up/higher I think it attracts (some) investers.
Cool that the new projects get very sophisticated, some things are way over my head, but I really think you should keep things simple with ALD. That is if the plan still is to be the Berkshire Hathaway for the ordinary small Joes. And an other thing, the team/people in here are so sophisticated and clever in defi that you often forget that many of you future customers does not find defi that easy and frictionless. Sometimes I really think some kind of low key PR would be great for ALD. I mean it is kind of nerdy in here/on twitter, in a good way!, but you dont really reach out noob crypto investers that way.
Anyways glad I invested in ALD, an happy to be here, just my thoughts of ALD. And this is written without me meaning anything negative./AldOG
I agree that a part of the protocol income should be applied for curve gauge voting.
And, I like the synergy of utilizing concentrators to maximize ALD/ETH yields.
However, I think this option is for advanced users.
In other words, as @AldOG says, there should be a mechanism to buy back ALD with a part of the protocol income and give it back to the staker (xALD holder).
This option is for beginners and is similar to buying Berkshire Hathaway stock and leaving the investment to the geniuses.
If protocol income alone is not sufficient, it will also be necessary to secure investment funds through ALD inflation.
I agree with the option of locking ALD (xALD) to receive incentives beyond staking.
I know Yearn Finance publishes quarterly, I would like to read Aladdin’s report as well.
One thing the community needs to understand is that the results of their investments are not immediate, so we should not be upset if the report shows a deficit in the short term.
Thanks Tao for your thoughtful and detailed suggestions. My layman’s first reactions:
Curve gauge voting for ALD/ETH
I like this idea, it seems a good way to generate awareness for ALD and incentivize liquidity providers for ALD/ETH; also support the Concentrator integration
Reduce ALD staking APY from 10% to 5% to generate ecosystem liquidity
I agree those funds could be better deployed elsewhere
The challenge is electing where to deploy, and how to decide (DAO votes quarterly or something?)
I like: buying back ecosystem tokens and max locking them (CTR/CLEV/ALD)
I like: funding new internal protocol development
I don’t know: building an in-house arb/MM team focused on Aladdin ecosystem (how practical/valuable given the relatively small $ amount involved? I just don’t know)
I dislike: funding external protocol development (inconsistent with why I invest in ALD)
Enable VexALD (4yr locking), and clearly define benefits of VexALD
I also like this concept, which could be structured in various ways.
I like: airdrops of internally developed protocols (or lower new token price), higher yields if/when distributions paid to ALD holders
I like less: offering lending options to VexALD holders (either trade off liquidity for the benefits by ve-locking, or don’t - no “backdoor” liquidity, just my preference)
other benefits: I can imagine a marketing line like “in exchange for 4yr-locking your ALD, you receive amplified yield, preferred access to internal protocol launches, priority access to airdrops [if Aladdin gets airdrops from external protocols?] and other Aladdin ecosystem perks”
Publish regular reporting on ALD’s income and expenses
great idea; helps determine book value of ALD and transparency build trust between Aladdin and its community
Thanks @Tao for putting this initiative on the table. As also a user and holder of Aladdin Projects shares, i’m eager to see a change on the ALD tokenomics.
1- I agree getting ALD/ETH a gauge. However i’m not sure that bribing the pool with Ald revenues is a positive flywheel for the DAO. There is about 900k$ liquidity on Curve already, without any incentivization, bribing this pool should be in order to grow liquidity and not rewarding LPers which may not be linked to the successfull growth of the project.
1-b: I would also add a proposal to define how to best farm Aladdin DAO treasury and distribute a share of the resulting yield to the lockers.
2- I think Aladdin DAO should continue liquidity mining and use a share of it going to Lockers and the rest going to LPers by bribing on Curve so that LPers are still slightly incentivized but less thank lockers since they don’t take the locking risk.
3- As for FX protocol, why not thinking about a 80/20 ALD/ETH pool that can be ve-locked on Aladdin and for which lockers will receive a share of Aladdin DAO revenues?
4- Agree, would be really interesting to have a regular report. I think 2 per year is a good start at this state of the DAO.
1 - Yes, there is 900k $liquidity on curve without incentivization, but most of them are from Aladdin DAO treasury. If we get ALD/ETH a gauge and provide the proper amount incentive(vlCVX vote or bribing), we can use these Aladdin DAO treasury in other place. Also, we are providing ALD holder another way to farm their token if they don’t want to lock for 4 years.
2 - Agree. That’s why i say 30% go to LP and 70% go to lockers
3 - It sounds cool. Not sure ALD holder would prefer ve lock 80/20 ALD/ETH pool token or pure ALD. But again, it is big commitment in crypto world like @AldOG mention in his post.
Hey @Admiral Thanks for the detail reply
For 2, building an in-house Arb/MM team. The farming frequency of concentrator drop after the farming policy change. I do see some complains that their vault is not farming for over 2 weeks due to low TVL and high gas. I wish the in-house arb/mm team can help the ecosystem even without much earning. Customer don’t have to give up unharvested rewards.
For external protocol, i wish they can invest some awesome protocol in early stage within the curve ecosystem or DEFI in general. Something like Frax finance invest their gauge voting to exchange CLEV token.
For long term investors who don’t need a fixed income, buying ALD tokens and staking/locking veXALD is a good strategy to maximize revenue sharing from the protocol.
For long term investors who do need a fixed income, buying CLEV tokens and locking them up can provide weekly revenue distributions.
For short term investors, farming ALD/ETH pairs using a concentrator can be a good option to generate yield in the near term.
Overall, the ability to offer different yield generating strategies through tokens, staking, and farming is helpful to cater to the needs of different types of investors within the Aladdin DAO ecosystem. This allows investors to choose the option that best matches their risk tolerance, time horizon, and cash flow needs.