[REVIEW] [GF: Phase 1 Proposal] Tarot

thank you for your input @jackanorak , quick question

this is on OP chain ? or on any specific platform ?

most liquidity and centrality are WETH and USDC

and who is “we”

‘We’ is Optimism unless I am specifically referring to Velodrome. I speak here in my capacity as an engaged community member. We, Optimism, need an actual plan to ensure OP’s routing and LPing centrality and not piecemeal requests if we desire this.

If we look at Uniswap’s TVL’s (here filtered for deep pools), I’d say it’s USDC and ETH and it’s not close. I can’t show a popup in a screenshot so you just have to go off the list here.

Give me a few minutes for a more comprehensive display so we can be more certain.

Thanks, that make sense. But again, like you said, this needs to be discussed with project team and OP team.

From the gov side, I am willing to wait it out and I hope this get resolved soon.

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On Velodrome, protocol emissions are aligned with fees generated, not simply liquidity, and USDC-TAROT would collect more fees through trading volume than OP-TAROT. This is reflected in the fact that USDC-based pairs are much more popular than OP-based pairs in terms of total votes by veVELO holders.

Due to the nature of vAMMs, it makes sense to minimize price impact by having more liquidity concentrated in a single pair like USDC-TAROT, rather than splitting liquidity across multiple pairs.

Finally, as many tokens are already paired with USDC, multi-hop trades would route TAROT->USDC->XYZ, rather than TAROT->OP->USDC->XYZ, resulting in a more efficient route with less hops for most trades.

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Sorry, I want to be clear on what you mean by this needing to be discussed with the project team and OP team.

Okey, this I agree USDC-based pairs are more popular but we also need to start somewhere with OP pair too, right ? You can also write it like “we will allocate 10% for TAROT/OP pair for first 6 months, if not used, we will move this reward to TAROT/USDC or other pair”

Apologies, this is above my knowledge and understanding but will wait for someone who has to comment on this.

multi-hop trades would route TAROT->USDC->XYZ, rather than TAROT->OP->USDC->XYZ, resulting in a more efficient route with less hops for most trades.

We, Optimism, need an actual plan to ensure OP’s routing and LPing centrality and not piecemeal requests if we desire this.

This “we”, if a plan is needed and for that involvement from OP Team is required then project submitting the proposal should bring this to OP Team so that they can work on this. One of the goal here is to bring liquidity and if you think creating a plan and working on it collaboratively will help us, I will join you in echoing your voice.

That’s what I mean by project team and OP team.

Ah, understood. Then in that case I’d guide you to reconsider Velodrome’s system-wide proposal for shoring up OP liquidity, which has been personally supported by Norswap (tho not in a OP team capacity).

Not focus on the particularities to be determined, but evaluate the high-level value of the proposal so we can discuss it productively. Even if we move to a different structure, I think it’s as good of a start as anything else proposed. And I’m sure others will join to weigh in.

ahh…okey, if by “we” you meant token house/OP team and your team and we can continue this discussion there.

For this proposal, I have only one suggestion as mentioned above.

Tarot has been a pleasure to work with on Fantom, and on Optimism. Their products are useful for retail investors engaging in leveraged yield farming, and they offer single sided staking (a surprisingly popular choice for many smaller holders).

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I strongly disagree with the use of 90% of the OP grant being used exclusively for the incentivization of their own token liquidity. The remaining 10% is also just being used to pay to the team. This seems like a poor use of OP funds.

Additionally, as OPUser brought up, liquidity should be paired with OP, not USDC as that would promote OP on optimism.

Furthermore, the timeframe of distribution is too short. 6-12 months to distribute all the OP for just TAROT LP incentives does not seem right AND 3-6 months for the distribution to pay the team 10% of the grant?

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6-12 months is fairly in line with a number of other grants, afaik?

I agree the 3-6 months for payment could be extended out to match the distribution of rewards.

Its slightly unclear to me what Operations payments means, is this personnel related? Maybe some clarity on these points would help reassure people Tarot is here to build on Optimism for the long term :slight_smile:

The proposal has been updated to clarify that the 10% portion of OP will be paired with team-held TAROT and provided as initial OP-TAROT liquidity for a period of at least 12 months.

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Please see my reply to @OPUser above regarding the 10% portion of the OP allocation.

Additionally, the proposal has been updated to firmly set the 90% OP distribution over 12-16 months, as well as providing initial OP-TAROT liquidity for at least 12 months.

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Updated the proposal to clarify how the 10% portion of OP will be allocated (paired with team-held TAROT and provided as OP-TAROT liquidity for at least 12 months).

This team-held liquidity makes it clear that Tarot is interested in building on Optimism long-term.

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Hi @TigrisOfGaul

Thank you for the changes but i dont see it reflected in the proposal.

Liquidity providers (90%): 540,000 OP is allocated to liquidity bribes and other liquidity incentivization mechanisms on Velodrome and Beethoven X to incentivize TAROT-based liquidity (e.g., USDC/TAROT, TAROT/ETH, OP/TAROT).

Please mention how many pair you are targeting and how much token will be allocated to which pool.

Core team + initial OP-TAROT liquidity (10%): 60,000 OP is allocated to the Tarot core team in support of Tarot’s growth and operations on Optimism. The OP will be paired with team-held TAROT and provided as initial liquidity on Optimism for a period of at least 12 months.

Why do you need token for core team ?

If we are asking teams to come build on Optimism, it seems totally fine to me that some portion of grants goes towards paying teams.

In this case it seems like 10% of the grant would be paired with team-held TAROT, provided as OP-TAROT as liquidity for minimum 12 months.

In terms of dollar amounts we are talking about $46,000 USD, not sure how many team members Tarot has but don’t feel as though this is about self-enrichment.

Above all, Tarot seeks to sustainably incentivize liquidity on Optimism for the long-term. It’s much more capital efficient to target incentives over time according to liquidity needs, rather than commit to a specific, fixed allocation for particular pairs an entire year ahead of time.

Please mention how many pair you are targeting and how much token will be allocated to which pool.

The current expectation is to incentivize a USDC-TAROT pair on Velodrome and a weighted pool on Beethoven X with OP, TAROT, and possibly also ETH. Crucially, in addition to OP incentives, pools on Optimism will be incentivized with TAROT (and may also be co-incentivized by Velodrome and Beethoven X).

Proposals from other projects may explicitly commit to allocations and incentive structures far ahead of time, but I believe this is shortsighted. In reality, the target liquidity amounts and APRs for overall incentivization should be monitored and adjusted regularly to ensure they are most impactful for the Optimism network.

Why do you need token for core team ?

The 10% portion of OP goes towards providing a significant amount of initial liquidity on Optimism for a period of at least 12 months. The other side of that liquidity (TAROT tokens) is provided by the team. This demonstrates committment on both sides and ensures long-term alignment of incentives.

Fine, dont commit, could you make it flexible. "we are planning to distribute X amount of OP token in first week but if price has to go down, we will do reduce/increase it to Y " and so in…

You believe that its much more capital efficient and I dont, in this case we cant have a discussion. but if you provide a plan, we can discuss that.

My personal suggestion:-
Choose two or max 3 pair.
TAROT/X
TAROT/Y
and
TAROT/OP

distribute reward equally. 33% each.

Also, in order to get the incentives, as a user, i will need to buy TAROT hence boosting your project native token which is a big red flag in this proposal but I will support if tarot/op pair is part of this.

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You’ll be happy to hear that OP-TAROT will certainly be included.

Also, to be clear, you will not necessarily need to buy TAROT, as the TAROT incentives (as outlined in TIP-018) apply broadly on the Optimism network. As such, TAROT may be earned by lending/borrowing in Tarot’s OP-ETH pool, for example.

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