Posted on behalf of the Aladdin team.
CLever enabled its full fee collection recently. We are approaching the time when we will start revenue sharing distributions, and want to explore some options with the community.
We have devised a unique revenue distribution system for CLever, for consideration by the community. It is called a “revenue trust”, and it would form a symbiotic addition to the CLever system, maximally rewarding veCLEV holders with the longest time horizons while still allowing users the ability to exit any time, within limits. By making veCLEV more rewarding to users with longer time horizons, we can attract users who will govern with protocol quality and longevity in mind.
The revenue trust works by automatically and permanently locking all CVX revenue in a “trust” (which is in turn deposited in CLever for bribe yields). Shares in the trust, representing a claim on trust yields, are tokenized; for each CVX earned by a veCLEV holder and auto-locked in the trust, they receive one cveCVX.
As the CVX in trust generates yields, they are distributed as clevCVX among the cveCVX stakers. If at any point a user wishes to exit their position in the trust completely, they can unstake and burn their cveCVX in exchange for clevCVX at 1:1. By doing this, future yields associated with those burned cveCVX would be shared among remaining stakers, effectively amplifying the yields of all remaining cveCVX stakers.
At a high level it would work like this:
When CVX revenue is harvested, it is deposited in CLever so that it begins earning bribe yields. This CVX is owned by the trust.
veCVX is minted 1:1 against new CVX in the harvest and distributed to veCLEV holders. cveCVX represents a claim on yields from the trust.
veCLEV holders claim their cveCVX and stake it for a share of yields from the trust
Yields earned by CVX in the trust, denominated in clevCVX, are distributed among cveCVX stakers
Any user who wishes to exit the trust may choose to burn their cveCVX in exchange for clevCVX 1:1. Burned cveCVX amplifies yields for remaining stakers.
Each time a user chooses to exit the system, the clevCVX required to pay them out is borrowed against the trust principal. The system would allow exiting into clevCVX as long as the overall trust LTV remains below 50%.
If the trust LTV were to reach 50%, withdrawals would be temporarily disabled until further revenue harvests open up more withdrawal space. It should be noted that if the LTV ever did reach this limit, it would imply all remaining cveCVX stakers yield would be amplified by 2x.
- veCLEV holders’ share of CVX revenue is made automatically productive
- veCLEV holders who wish to claim and exit with their revenue immediately would have to do so via clevCVX
- Yields earned by the trust would be distributed in clevCVX
- Exiters benefit long-term remainers by forfeiting all future yields of their share
- All revenue is locked in CLever, which supports the platform (and ultimately token price, etc.) via increasing TVL
The system is designed to favour longer term participants, while still allowing users the flexibility to exit (though it must be through clevCVX).
Design Goals and Principles
As always, the name of the game is to make sure that the governance power of the platform rests with those who have the longest term stake in its success. CLever stands the best chance of thriving in the long run if its decisions are all made with that timescale in mind. This system helps to make veCLEV more attractive for users with the longest time horizon by creating a snowball effect that reinforces their long-term rewards.
The second benefit of this system is in feeding CVX revenue permanently back into CLever to create “forever TVL”. This type of deposit creates a sort of baseline non-withdrawable TVL, the ultimate in stickiness, which is a strong narrative and may help with CLEV price support and overall platform trust and longevity.
Note that this system has not begun development since it is not clear yet that the community would choose to implement it. The team will await the green light from the community before starting work. Details may change during development based on technical challenges or new information.
We’re looking for feedback, comments, and a general sense of the community’s level of interest in this type of mechanism. If there is good support here in the forum we will move the issue on to Snapshot voting for veCLEV tokenholders. Note that if this system is implemented, it would apply to all CVX revenue distributed, there would be no possibility for veCLEV users to opt out.
- FOR: I support the revenue trust concept and would vote to implement it
- AGAINST: I do not support this idea and would rather see revenue distributed in vanilla CVX
- AGAINST: I think we should explore other, different ideas for revenue distribution (see my comment below)