SDIP #3.2 - Farming EPS

Important:

  1. xSDT HOLDERS WILL BE ABLE TO VOTE ON THIS PROPOSAL. IF YOUR xSDT ARE STAKED IN THE PALACE, PLEASE WITHDRAW THEM TO BE ABLE TO VOTE. (There are no penalties for withdrawing from the palace).
  2. This is the second in a 2 part proposal; see part 1 "SDIP #3.1 - Distribution of EPS rewards” here.

The context for this SDIP can be found in 3.1 here


Specification

The DAO has benefitted from very high APY from farming EPS as per governance, The APY is now ~360% APY so it is responsible to reevaluate our original position.

Currently, we are claiming early and burning 50% of each airdrop and staking all of it for a further 3 months. The staking rewards are split as follows; 75% re-locked for 3 months to farm rewards, whilst selling 25% for SDT (70%) and CRV (30%).

  • The SDT is split equally between PPS stakers and gifts to The Sanctuary.

  • The SDT is be used to lock CRV into the PPS.

Should the DAO continue as before?

  • Yes
  • No

0 voters

If you prefer to pivot, please leave your suggestions in the comments below. Whilst there are no “right” answers data-driven insights are typically the next best thing.

After 2 days at 09:00 UTC on Monday 24 May, a vote will be published on signal to formalise the poll above. If there are multiple options to decide from, they will be presented to the DAO to vote on. Stake DAO will take a snapshot shortly prior to publishing the vote.

Because of the results on the vote for the distribution of EPS rewards (ellipsis low adoption, curve now on polygon, risk) and interest of stake dao long term comes first. I think we should reconsider and lower the amount relocked to max. 30-40% and use the proceeds for the sanctuary and to get more CRV into the PPS instead and reconsider again later.

1 Like

There was an error in my original post - all airdropped EPS are staked for 3 months to farm on Elipsis. The rewards from staking are split as follows; 75% to compound and 25% converted and distributed to Stake DAO, sdveCRV supporters and locked in the PPS.

The situation has changed greatly from the time of the earlier vote, when the staking yield was so high that it could earn back the 50% penalty within the lock-up period. This is no longer the case.

Right now, vesting an airdrop would retain 100% of it after a month. Taking the penalty and locking up EPS returns, at current levels, 69% of the airdrop after three months (50% penalty, 37.7% yield on the remaining half over three months). The yield is on a downward trend so the final outcome may be worse than this.

The pivot here is obvious. It makes no sense to stick to a plan when the facts underlying that plan have changed.

1 Like

Thanks @southseacompany very valid points. In my opinion, for the DAO it is a loss making action, therefore, it makes little sense to continue as before and lock EPS for a further 3 months

Indeed, so by claiming the tokens 3 months early (and therefore getting 50% of the tokens instead of 100%), you need to earn 100% within 3 months (~400% APY) to make these tokens back, else it’s not worth it.

Since the APY is below 360%, and since there is a risk that the APY drops further, I think it’s pretty obvious that the safest would be to STOP claiming early, and just wait for the 3 months to claim 100% of tokens everytime.

I think it’s deffo not now worth withdrawing it early and getting cut 50%, just claiming and letting it sit for the period is the way I think. APY won’t cover that 50% anymore. Hopefully in the future EPS takes more ideas from CRV.

The vote is live now on signal, closing at 13:00 UTC tomorrow.