Summary
Modify Concentrator’s fee distribution to reserve an allocation for DAOs that contribute to the overall TVL of the protocol.
Motivation
Concentrator seeks to capitalize on a collaboration with other DAOs to drive further growth for its TVL. Higher TVL means more harvesting frequency and a better user experience for all Concentrator farmers. It is also critical for Concentrator to build out composability with the broader DeFi community as it is an important moat for any DeFi protocol.
Proposal
This proposal aims to modify Concentrator’s revenue distribution into three parts:
-
veCTR holders: 33.3%
-
Concentrator treasury: 33.3%
-
Collaborative DAOs: 33.3%
In conjunction with the proposed modified revenue redistribution, an additional 3-tiered incentive structure to revenue sharing for DAOs is also proposed. The following incentive structure would be applied to collaborative DAOs should they choose to place TVL into Concentrator harvesters:
Concentrator TVL Contribution Table
| TVL contributed by collaborative DAOs | % of Collaborative DAO revenue sharing |
|---|---|
| <5,000,000 | 15% |
| Between $5,000,000 and $20,000,000 | 25% |
| More than $20,000,000 | 50% |
At the end of each month, Concentrator will pay any DAO that participates based on their contributing TVL to the protocol. Any apportioned revenue remaining from the 33.3% reserve for collaborative DAOs will be donated to veCTR holders and Concentrator treasury on a 50:50 basis.
Here is an example of how the revenue distribution could be realized:
- Tricrypto Concentrator harvester has $30m TVL of which $10m is from various DAOs
- The harvester earns $300k per month in revenue
- Concentrator will run a checkpoint each week and distribute the revenue generated as follows: $100k to veCTR holders, $100k to Concentrator treasury and $100k to the collaborative DAOs’ reserve account. Because the participating DAOs’ TVL contribution is noted as between $5M and $20M, Concentrator will pay out 8.3% (33.3% x 25%) of $100k to the collaborative DAOs and donate the rest to veCTR holders and Concentrator treasury on a 50:50 basis.
Due to fluctuations in TVL over time for a given vault, Concentrator would take a snapshot of each vault’s TVL contributed by different DAOs each week. A weighted average of contributions would then be taken to ascribe vault TVL to each participating DAO.
For example:
Week 1: Tricrypto harvester TVL: $30m, TVL contributed by participating DAO: $10m
Week 2: Tricrypto harvester TVL: $25m, TVL contributed by participating DAO $10m
Week 3: Tricrypto harvester TVL: $35m, TVL contributed by participating DAO $12m
Week 4: Tricrypto harvester TVL: $30m, TVL contributed by participating DAO $8m
The weighted average TVL for the month is $30m (average of 30m, 25m, 35m, 30m) and the weighted average of TVL from the participating DAO’s contribution is $10m (average of 10m, 10m, 12m, 8m). Based on these TVL calculations, the DAO falls in category 2 from our contribution table above, and earns 8.3% (33.3% x 25%) of the revenue earned by the Concentrator Tricrypto harvester.
Concentrator will pay out $100k x 33.3% x 25% = $8.3k to the participating DAO and donate $91.675k to veCTR holders and Concentrator treasury with half each.
Poll
For: Modify Concentrator’s revenue fee distribution to reserve an allocation for DAOs that contribute to the overall TVL of the protocol.
Against: Do nothing.
- For: Modify Concentrator’s revenue fee distribution for collaborative DAO participation
- Against: Do nothing.