FIP 04A - Temporary Restructure the Booster Program

f(x) Protocol Improvement Proposals
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Summary

As part of our ongoing commitment to fostering community engagement and strengthening f(x)’s TVL, we propose a significant change to our booster program. Over the past period, the outcomes in terms of TVL growth have been below expectations. To address this challenge, we advocate for a strategic reallocation of resources, dividing the booster allocation into two parts: one for the booster program and the other for a referral system aimed at augmenting our TVL.

Background

So far f(x) protocol’s Booster Program has distributed to our community 10,000 FXN. At the current market price that is over USD $2,000,000. Despite this, we have observed a stagnation in TVL growth. This stagnation not only poses a threat to our platform’s sustainability but also impedes our ability to attract new users and retain existing ones. In light of this, it is crucial that we reassess our approach and explore innovative strategies to invigorate our TVL.

Motivation

There are two key objectives the team proposes this approach.

  1. TVL Growth: The primary objective of this proposal is to enhance f(x) Protocol’s TVL. By allocating resources towards both the booster program and a referral system, we aim to stimulate liquidity provision while simultaneously expanding our user base. This dual approach fosters sustainable growth in TVL over time.
  2. Community Engagement: The continuation of the booster program ensures ongoing support for our existing community members. By maintaining incentives for participation, we demonstrate our continuous commitment to rewarding community engagement.

Implementation

  1. Booster Program Reallocation: We propose dividing the current allocation for the booster program in two parts: one part will continue to support the booster program, incentivizing community participation and awareness. The other part will be redirected towards a new referral system aimed at expanding our user base and increasing TVL.
  2. Referral System Implementation: The introduction of a referral system will enable us to leverage our existing user base to attract new users. By incentivizing referrals, we can tap into networks beyond our current reach, driving organic growth in TVL. This referral system will reward both the referrer and the referred user, creating a mutually beneficial incentive structure.

The proposed allocation is 500 FXN per month for the Booster Program and 2,000 FXN per month for the referral system.

Booster allocation:

We believe that the current voting system that relies solely on governance voting may lead to unfair rewards distribution due to lack of impact measuring and qualitative KPIs and the weight of vlCVX voters.

We propose that any booster has to register for each tranche, highlighting their work. Instead of a governance vote, we propose that the Aladdin DAO core contributors and A Team decide the rewards distribution, taking into account the impact each booster had. A Team members can opt to be part of the Booster Program. If they choose this, they will cease the decision power over the rewards distribution.

Referral System:

We propose a part permissionless referral system based on points called FX. Any address that holds a stable or leveraged token or has deposited in any LP of them can create a referral link. At the end of each month the points can be exchanged for $FXN tokens. The exchange ratio will be proportional to the total number of points distributed each month: 1FX=2000FXN/ total FX

FX allocation:

4 FX for 1 or any f token minted;

2 FX for 1 of any x token minted.

We propose a 50% - 50% FX split between referrer and referral.

The referrer will be awarded extra points based on the total number of FX accumulated by the end of each month:

-1% extra FX for 2,000,000 FX

-2% extra FX for 4,000,000 FX

-3% extra FX for 6,000,000 FX

-4% extra FX for 8,000,000 FX

-5% extra FX for 10,000,000 FX

In conclusion, the proposed reallocation of resources towards a referral system represents a strategic shift in our approach to enhancing TVL. By diversifying our incentive structures and empowering our community to participate in the growth of the platform, we position ourselves for long-term success and sustainability.

Revision of the Referral Allocation (02nd April, 2024)

Following community’s feedback, we have revised the referral FX points allocation. In order to deter bad actors, FX points distribution will be time weighted and will also be offered for staking in the Stability Pools.

Revised FX Allocation:

4 FX/day for 1 fToken staked in any Stability Pool

2 FX/day for 1 xToken held in wallet.

We propose a 50% - 50% FX split between referrer and referral.

The referrer will be awarded extra points based on the total number of FX accumulated by the end of each month:

-1% extra FX for 2,000,000 FX

-2% extra FX for 4,000,000 FX

-3% extra FX for 6,000,000 FX

-4% extra FX for 8,000,000 FX

-5% extra FX for 10,000,000 FX

4 Likes
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Thank you for writing this Pauls. A very interesting direction.

Can you expand on the A-Team being a council? If we decide to not participate in the booster voting to be on the council, are we rewarded for it somehow? Will our earnings from this program then be just with an A-Team ref link that we split between us there and personal ref links?

Hope this structure also supports our work as the A-Team ofc.

Another thing - can you address to the amount of points and FXN rewards and how it will correlated with the TVL? Will there be specific KPIs to reach in order to really get the full 2000 FXN there?

Also, how do points turn into FXN exactly? And in what ratio? Also, when is this happening? Like how long is it distributed for?

Thanks again!

1 Like
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I really like the idea that focus is on TVL growth, we need fx TVL to grow, not to end up like CTR and CLEV starting out hot, and then stagnating.
Maybe set up some criterias for TVL growth each month that correlates with how much of the 2000 FXN will be payed out, else the FXN can be used in other ways to boost TVL. Importent thing is NOT paying out the FXN without satisfying TVL growth. Maybe others have backup ideas for stimulating TVL growth to be used when referral system not cutting it with regards to TVL growth each month?

1 Like
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Hey DAdvisoor

No you’re not rewarded for being in the council. So any A-Team member can choose to be a booster or part of the council that allocates rewards. It wouldn’t be fair to be player and referee :slight_smile:

A-Team has a separate budget, that’s been requested by it’s members and granted by DAO following the governance vote.

There isn’t a fixed amount of points. 4FX points will be distributed for one f token minted and 2 FX points for one x token minted. At the end of a month we will calculate the total amount of FX points and divide by 2,000 FXN . e.g., if in April there will be 10,000,000 f tokens and 5,000,000 x tokens minted through referrals, total FX rewarded will be 50,000,000. 2,000/50,000,000=0.00004 FXN/ FX point.
This is going to run for 3 months initially.

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Hey Guys,

I think its a good idea, and am happy to see Aladdin really trying to push more community involvement.

On the referral system, would it possible for someone to keep referring themselves for points? I think the design would have to consider this and have mechanics in place that prevent this.

1 Like
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I am for both the restructuring of the Booster allocation program and the referral system. I think that the referrals should be left up to the team, at this point, to determine, in contrast to a governance vote. I support this because I think it will be less likely to become a popularity contest with this change.

Furthermore, I support the referral system. I think that it will offer more incentive than simply allocating everything towards the booster program.

1 Like
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  1. Why stick to the same 2500 FXN per epoch? That’s currently half a million being spent on marketing without super well defined KPI.
  2. The devs and core team are clearly not compensated enough based on the votes during the previous round. Why not setup a monthly amount there in FXN as well?
  3. 2000 FXN is too much for a purely referral based approach. Some of it can be freed up to incentivize other ways.
  4. Why not also have a dedicated professional marketing team or reach out to highly visible influencers to be ambassadors? A dedicated team will have a well defined metrics for success. Ambassadors will have massive reach which very few in the Aladdin and Curve eco have right now. If the ultimate goal is to see protocol growth in every way, these avenues need to be considered as well.
  5. FX only has 6.1k followers on X at the moment. Why not promote the products through ads as well? One of the KPIs here will be to greatly increase follower count and therefore visibility.
5 Likes
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I really agree with Stark here, very good points all of them.
Right now the boosting done on x is not reaching more TVL, things are stagnating for fx just like ctr and clev, Point 4 and 5 is a shot at changing that.

2 Likes
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I am in agreement on this too. I think this needs to be looked at like a marketing budget and currently, this marketing budget is not being spent intentionally. No criticism here; this is uncharted waters. But just because this is a DAO doesn’t mean we cannot approach this with the same professionalism of a traditional company. The budget is more than enough for this.

I also think that it could be wise to structure part of this budget around an “airdrop incentive structure,” as this is both what crypto media and the crypto community respond most to.

2 Likes
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  1. If 2000 fxn decision for ref based approach goes through, at the very minimum it can’t be a simple allocation. There has to be more nuanced calculations such as:
  • 100% more TVL achieved = 2000 FXN
  • 50% more TVL = 1000 FXN
    and so on …

At least this way one can justify the great expense through KPI milestones.

These milestones can be adjusted overtime for each month as well.

4 Likes
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For sure, this is a very important point

1 Like
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I like that concept and it should be easy to implement.
The reward is based on TVL not fix amount per month. We might save these FXN to market in layer2 or other integration which bring in TVL.

1 Like
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Stark raises excellent points.

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Hey everyone, I modify the referral system based on @Stark feedback. Please let me know if you have any suggestion or comments on that.

Referral system：
Rule：

  • Any address can create a referral link
  • At the end of each month the points can be exchanged for $FXN tokens. （ We can distribute them in Base chain and Ethereum chain, no vesting period）

FX allocation ( community allocation boosting):
The total FXN emission is based on mint volume in that month:

  • 200 FXN for every 1500 ETH increase in reserve.
  • Once we reach to 7500 ETH increase in reserve, 1000 FXN + extra 0.5% total reward boost = 1050
  • Once we reach to 15000 ETH increase in reserve, 2050 FXN + extra 1.5% total reward boost = 2080
  • The max reward 2080 FXN per month

FX points

  • 4 FX/day for 1 fToken staked in any Stability Pool
  • 2 FX/day for 1 xToken held in wallet.
  • 50-50% FX split between referrer and referral

FX points boosting

  • 1% extra FX for 2,000,000 FX
  • 2% extra FX for 4,000,000 FX
  • 3% extra FX for 6,000,000 FX
  • 4% extra FX for 8,000,000 FX
  • 5% extra FX for 10,000,000 FX

Example:
User A deposits 50K fToken in stability pool with other referrer code and his referral mint 50k xToken on day 1 and holds until the end. He will get 50K430/2 + 50K230/2 = 3,000,000 + 1% extra = 3,030,000
At the end of month, the protocol reserve has 7500 ETH increase, it will have 1050 FXN allocated for all the FX points generated in that month.
7500ETH increase will get average total 25M * 15 * 3 = 1125 M FX point (assume average stake in mid of month and 50% new mint in fToken)
User A will get around 1050 * 3.03 / 1125 = 2.83 FXN.

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Referral system：

Rule：

  • Any address can create a referral link
  • At the end of each month the points can be exchanged for $FXN tokens. （ In arbitrum, no vesting period, Llama lend / Curve FXN/ETH LP are available, cheaper gas fee）

FX allocation ( community allocation boosting):

The total FXN emission is based on reserve ETH increase in that month:

Base reward (if we don’t achieve the milestone)

  • 30 ETH increase for 4 FXN; Total FX points: 3036003*30 = 9.72M => 1 FX = 0.0000004115

3 milestones:

  • Milestone 1: 3K ETH increase 400 + 4% extra = 416 FXN reward; Total FX points: 3000 ETH 3600 (ETH price) * 3(avg point per dollar)*30 = 972M => 1FX = 0.000000428 FXN
  • Milestone 2: 6K ETH increase 800+ 10% extra = 880 FXN reward; Total FX points: 6000 * 3600 * 3 *30 = 1944 M => 1FX = 0.0000004527 FXN
  • Milestone 3: 9K ETH increase 1200 + 15% = 1380 FXN reward; Total FX points: 9000 * 3600 * 3 * 30 = 2916M => 1FX = 0.0000004733 FXN

max FXN reward is 2000 FXN

FX points

  • 4 FX/day for 1 fToken staked in any Stability Pool
  • 2 FX/day for 1 xToken held in wallet.
  • 50-50% FX split between referrer and referral

FX points boosting

  • 1% extra FX for 2,000,000 FX
  • 2% extra FX for 4,000,000 FX
  • 3% extra FX for 6,000,000 FX
  • 4% extra FX for 8,000,000 FX
  • 5% extra FX for 10,000,000 FX

Example:

User A deposits 50K fToken in stability pool Token on day 1 and holds until the end. A get 50000430 / 2 = 3,000,000 + 1% extra boost = 3,030,000

At the end of month, the protocol reserve has 6K ETH increase which reach to milestone2, it will have 880 FXN allocated for all the FX points generated in that month.

User A will get 3,030,000 * 0.0000004527 = 1.37 FXN. The referrer of User A also get 1.37 FXN