[REVIEW] [GF: Phase1] Homora V2 x Ironbank on Optimism

đź“ś Grant Proposals Governance Fund: Phase 1
, ,
11

Hi, appreciate your feedback. We agree to lower the distribution per week to the suggested number and extend the allocation period as a response to that. We are also now finding potential workarounds to address the co-incentives matching and OSS concerns and will keep gathering more feedback from the delegates and incorporate into our proposal once ready.

For the final point, we would appreciate your support to consider and facilitate transferal of our proposal to be reviewed by DeFi committee A. Let me know if you need any more clarifications.

1 Like
12

Regarding transfer, we are moving forward with initial distribution so transfer would not be possible.

But please join community call tomorrow, if possible, and raise this topic, always good idea to see what community think. From my side, whole point of distributing the proposal according to block height was to remove bias and distributing individually might raise more concern.

1 Like
13

Hello Prima, I don’t think proposals should be transferred to different committees upon request. Defi Committee C has been assigned your proposal, so it is appropriate for them to review and give a recommendation on your proposal in the next round. Transferring this proposal to a different committee for review doesn’t make sense and creates a bad precedent.

1 Like
14

Sharing our comment from Discord here as well for better visibility in this thread:

“Appreciate that you lowered Ask slightly and extended distribution period. Imo 640K Op for liquidity incentives (short-Term APY boost) without co-incentives is still pretty hard to vote for.”

Potential improvements (in the best case a combination of the following):

  • (Lower Overall Ask, put higher focus on project onboarding than LM)
  • Co-incentives: Match at least the liquidity mining rewards
  • Adjust distribution & or incentive design for more sustainable, sticky incentives
  • Target existing user groups, pools, projects to move over to (your pools on) Optimism

We believe Alpha Homora can significantly contribute to initial liquidity flow to important Optimism pools ($30M already, good initial pool choice :+1:) with this proposal.

As Homora is mainly attractive to “smart money” though, we are afraid these LM incentives will be picked up by professionals and excess users & liquidity will leave as soon as Op incentives run out.

Thinking out loud…end-user onboarding is tough at the moment but we believe it’s a great time to onboard stablecoins, large projects to Optimism DEXs and consequently to levered pools on Homora.

Looking forward to your ideas around co-incentives matching and OSS concerns!

1 Like
15

Thank you for the update @OPUser @katie , understood and respect the delegates’ decision

16

Voting Cycle #7: Roundup Make sure you guys post here with your two delegates (Katie and myself).

17

Key updates on Homora V2 on Optimism proposal (06 Oct 2022)

1. Proposal submission structure change

Homora V2 will apply the Optimism governance fund with our partner: Ironbank, which is a multi-chain protocol-to-protocol lending platform that provides excess liquidity for leveraging on Homora V2. Thus, the previous Homora V2 on Optimism proposal will now become a co-proposal between Homora V2 and Ironbank.

2. Protocol information update

As a result of (1), key information (contact person, website link) and all relevant metrics relating to the Ironbank protocol will now be included in the proposal.

3. No. of tokens request and allocation

We adjusted the number of tokens requested to the amount that we believe could attract more TVL and activities on Optimism given the contribution of both Homora V2 and Ironbank. We also add the allocation to bootstrap OP lending pools as an additional to only the borrowing side to help lower the amount of OP in circulation.

4. No. distribution period

We extend the distribution period from previous 16 weeks to a total of 50 weeks (roughly 1 year) to show lower the requested tokens burn rate and show our intention to support sustainable growth on Optimism.

18

I don’t believe that anyone here has suggested a longer term and yet you’ve gone from 8 to 10 to 16 to now 50 weeks in response to feedback that the weekly ask is too large.

Could you explain why this is preferable to lowering the ask but maintaining the term?

I also see that today you’ve increased the ask from 800k to 1mm – can you please break down the feedback that’s gotten you here?

1 Like
19

Hi, thanks for the feedback. To clarify, we benchmark our protocol TVL contribution with other protocols applying for the grant, so we considered the ask a reasonable amount given that we are applying as a joint proposal between Homora V2 x Ironbank. However, we will take this to the team to reconsider our ask amount.

20

Thank you for the changes.

One suggestion would you consider replacing WETH-OP 0.3% to a different $OP pair. Gamma has a join proposal of 900K OP dedicated for this pair, so what do you think about using different pair ?

Could you also share which proposal you are referring too ? Also, weekly distribution plan and duration is final or you are still getting feedback on those ?

1 Like
21

This update shows significant changes in the proposal:

  • Ironbank as co-proposer has already meaningfully contributed to (TVL) growth on Optimism incl. the liquidity mining campaign financed with IB tokens
  • Overall distribution of tokens will still be 80% towards liquidity and 20% for builders. Of the 80%, 15% go to OP lenders on IB which “might” cause less selling pressure than the 85% (680K Op) for liquidity mining of popular Uni V3 pairs.
  • IB offers co-incentives of 111K IB (current price 3$). Price of IB is trending down though and the marketcap is only $500K USD - hence the effective co-incentives might be much lower.
  • Distribution of LM rewards over 50 weeks instead of 16 weeks.
  • Ask increased again from 800K to 1M Op in total.

To summarize our thinking:

  1. Alpha + IB demonstrated already value-add and potential to move significant TVL to Optimism.
  2. 6 months distribution of LM rewards would make more sense. (Follow-up proposal possible)
  3. 20% (200K Op) Builder incentives can spur additional, sustainable growth.
  4. It’s great to have another place to take out a loan against Op on Optimism. (15% of 80% = 120K Op)
  5. 85% of 80% = 680K Op for liquidity mining incentives is still a huge ask.
  6. 111K IB as co-incentives on top of leveraged yield farms & lending pools show good will but there is a ? how much that will actually contribute.

→ Maybe reduce Ask by 50%+, stick to distribution over 6 months & create a new proposal when this co-growth program ends, success was demonstrated - incorporating lessons learnt.

Overall, this co-proposal looks stronger than the proposal before. Thank you for bringing in Ironbank. We appreciate the hustle for co-incentives though we are not confident they will be significant due to illiquidity and low floating supply.

Echoing @jackanorak’s comment, we don’t see a good reason for changing the distribution schedule towards 1 year and raising the Ask to 1M - still lacking significant co-incentives.

@prima You mention TVL contribution (see below): Liquidity is very important for protocols to enable traders and other protocols to build on. That said, we should look more at effective liquidity, marginal value added to the Op ecosystem and sustainable incentives, which also means that tokens should not be temporary APY boosters which are instantly sold & less Op incentives are left for the rest of the ecosystem. Some earlier proposals (xToken, Gamma, Uni Staker; all grants) might have gotten a larger amount but it’s important for Optimism to spend Op more wisely going forward to not waste resources, grow the overall ecosystem & not add risk without reward.

3 Likes
22

Hi @prima and @katie @mastermojo.

We’re seeing that this proposal received approval of these last two delegates. But in the last two days the proposal suffered a lot of changes (even in the title), so I think that its fair that at least @katie @mastermojo can review it again and ratify its approvals. This makes sense to avoid any type of gaming governance process. We know that these approvals doesn´t represent any sponsorship, but anyways this isn’t the proposal that the governance marked as ready to move to snapshot.

4 Likes
23

Thank you @OPUser

  1. We allocate to the WTH-OP 0.3% pair as it is an OP pair with the highest liquidity and trading volume on Uniswap v3 which aligns with Homora V2 pool listing requirements
  2. We have looked through the gov. fund excel sheet Optimism GovFund: Public Distribution Tracking - Google Sheets
  3. We are iterating based on feedback and working to bringing the request back to 800k before voting begins with duration period reduced to 6 months. Would love to have your feedback on those too.
24

Thank you for flagging this. I have not reviewed the recent changes and I am withdrawing my approval. I do not agree with significant changes being made to a proposal after receiving delegate support.

5 Likes
25

Recommendation from DeFi committee C

Details

Detailed proposal focused on liquidity mining and protocol integration. Homora (Prima) was active throughout the cycle, indulging community by answering their query and adjusting their proposal on the basis of suggestion and feedback.

Value-Add
Protocol was deployed in August and has attracted 23MTVL according to Defillama. Comparing Uniswap V3 TVL for the last month shows it has been steadily in the 49 to 55 M range. Nevertheless the protocol has attracted TVL which seems to have migrated from UniV3 but with no obvious increase on either side. Initial pool selection shows a good understanding of UniV3 volume drivers, already accounting for half of USDC/wETH (0.05%) total TVL on UniV3. They outline in their proposal that new pool/assets will be added and looking at their past performance they tend to go for the best return pools.

Traction
Not native to Optimism but the integration with UniV3 is new and unique. Activity on other chains has shown a consistent pattern of integration and resilience in the face of a downturn market movement. Their track record for Liquidity Mining shows a TVL expansion to accompany them.

Amount
Divided into 2 groups: Increased numbers on 6/OCT to 1M but also increased the time frame for distribution to 50 weeks
a) Type 1 / Liquidity Mining to incentivize borrowing (800K OP). Weekly 20K Distribution.

Lending pools (15% of Type1)

  • OP (15%) = 3,000 OP tokens distributed among OP lenders

Liquidity providing pools (85% of Type1)

  • Uniswap v3 WETH-OP 0.3% (45%) = 9,000 OP tokens distributed equally among OP and WETH borrowers
  • Uniswap v3 WETH-USDC 0.05% (20%) = 4,000 OP tokens distributed among USDC borrowers
  • Uniswap v3 WETH-DAI 0.3% (20%) = 4,000 OP tokens distributed among DAI borrowers.

b) Type 2 / Builder grant for protocols on top of Homora (200K OP)

Amount is a flat 200K to be distributed at the Alpha’s discretion with no specific milestones nor KPIs, the idea of building blocks on top of Homora or Iron Bank. Both seem appealing for Value added and Traction. As Homora is not a DAO, team will decide who to give this incentive which could be gamed easily. Their track record does not suggest such a path as probable. No Governance provision is included in the proposal. Additional information would help.

OP Distribution
Heavily increased from the revised 16 weeks to 50 weeks.
Track record shows this kind of programs if applied to borrowers can have a short/medium term impact. Sustainability should not be an issue considering Homora has already attracted a sizable chunk of TVL without incentives, same as Iron Bank. Suggestion is to focus on short duration.

Co-incentives
Co-Incentives are going to be run by Iron Bank using IB Tokens, around 111K IB tokens, ~340k USD at the moment of review. They represent around 40% of total ask which seems low when compared to other co incentives approved in the past.

Alignment
Alpha seems to be very aligned with the Ethereum ecosystem as a whole and Homora implementation is a building block on top of Dexes (Curve, Balancer, Sushi, UniV2, UniV3, PancakeSwap, Trader Joe, Pangolin, SpookySwap, Beethoveen X, SpiritSwap) AND on Iron Bank, Chainlink, Band Protocol.

General comment regarding Open Source, Homora has stated they will not open source on the short term, as a measure of security with its users.

Recommendation
No

Liquidity Mining was reduced 2 times from their original ask but then increased back to 1M. As was the distribution period to 50 weeks.
Furthermore the ask should be reduced at least to 500k, with a heavy emphasis on building composability on top and less on LM.Time-frame for distribution should be 4 to 6 months. Then can re apply if needed.

Note :- This committee acknowledge that the proposal was significantly changed after receiving the two-delegate endorsement. Which could mean that the original endorsement should not be considered binding. But this is an edge case as such scenario has not happened in the past and we can not make a rule change mid-cycle.

In case this proposal is included on Snapshot for voting, our recommendation should be consider as official committee decision.

cc @prima

Our past recommendation is available on committee recommendation thread.

1 Like
26

I am voting no. The amount requested is way too high and the proposal was edited to reduce the amount, then edited again to increase it to 1M.

27

Has this been updated for Cycle 8?

28

Minor updates have been made but we are also discussing on allocating more % to builder’s grant which we will include once we get alignment from all parties (Homora & Ironbank). Will make sure to keep you posted on the updates. Thank you.

1 Like
29

Hi, thank you all for feedback (the delegates, OP community, etc.) over the past 2 months after we first submitted our proposal for the governance fund cycle #6. Here is a quick recap on what we have been through as there are lots of both iterations on feedback for improvement and significant changes to the proposal after submission

  • Submited the proposal for governance fund cycle #6 by creating a thread and submitting in gov-temp-check in discord
    • Received the feedback, majorly on 1) Too much number of token requests and allocation period 2) No existence of co-incentives matching 3) Homora V2 being non-open-sourced
  • Actively reached out for >=2 delegates’ approval for cycle #6 but managed to get the approvals (from @katie and @mastermojo) during cycle #7
  • Revised the proposal structure to apply as a joint-proposal with our partner; Ironbank, a protocol-to-protocol lending platform which provide liquidity for Homora users to enable leverage
    • Added Ironbank information
    • Included co-incentives matching in $IB tokens
    • Increased number of tokens request to 1M, extended the period to 1-year
  • [Current] Re-submitted the proposal for cycle #8 as there are substantial changes in proposal structure
    • Actively reach out to integration partners and set up a solid process on what are the requirements and how our builder’s grant will be allocated

Below is the list of some feedback we received so far on cycle #8 and how we incorporated that into our latest proposal in order to move the proposal forward from [DRAFT] to [REVIEW] phase as per the operating manual.

  1. From @jackanorak on no. of tokens requested and distribution period, suggesting that a longer term of allocation should not be the solution for too much number of request.

“I don’t believe that anyone here has suggested a longer term and yet you’ve gone from 8 to 10 to 16 to now 50 weeks in response to feedback that the weekly ask is too large.”

We are looking to shorten the distribution period to 6 months

  1. From @OPUser on pool listing suggestions and LM rewards, suggesting that the different OP pools should be considered for LM rewards

“One suggestion would you consider replacing WETH-OP 0.3% to a different $OP pair. Gamma has a join proposal of 900K OP dedicated for this pair, so what do you think about using different pair ?”

We have thought about it but as now we are collaborating with Gamma protocol on integrating new pools (with auto-compound and rebalance features) on Homora V2 (Tentative pools are OP-ETH 0.3%, USDC-DAI 0.01%, DAI-ETH 0.3%, USDC-ETH 0.05%) which will be available around end of November, the full resources are allocated there to support this partnership. Therefore, we might revisit new OP pools again once we completed integration with Gamma.

  1. From @ScaleWeb3 on no. of tokens requested and distribution period, how the granted tokens are used, sustainability of apply rewards, suggesting lower no. of tokens requested and distribution period (to 6 months) and allocating more % as builder incentives, as well as looking into integrating with active manager protocol.

“6 months distribution of LM rewards would make more sense. (Follow-up proposal possible).”

“20% (200K Op) Builder incentives can spur additional, sustainable growth.”

“Liquidity is very important for protocols to enable traders and other protocols to build on. That said, we should look more at effective liquidity, marginal value added to the Op ecosystem and sustainable incentives, which also means that tokens should not be temporary APY boosters which are instantly sold & less Op incentives are left for the rest of the ecosystem.”

We are allocating more % to the builder’s grant, lower the distribution period, and explored integration with Univ3 active liquidity manager protocols.

  1. From @Netrim on open-sourced concerns and potential workarounds to push the proposal forward

“Not being open source subtracts support but it will not be a hard NO. Also you hinted there was a way to having a workaround for open sourced code.”

“For instance moving things from LM to the builder grant amounts was very well recieved”

We are cutting off LM rewards allocation to the borrowers and focusing on builder’s grant instead.

  1. From DeFi committee C cycle #7 recommendation, majorly suggesting on more allocation % to builders with provision of more transparency on builder’s grant (ie. how it will be distributed and key milestones)

We have included details of what are the key criteria of getting the builder’s grant, how the grant will be allocated, and add integration milestones.

To sum up, we responded to the above feedback by proposing these changes

  1. Total no. of token requests – The overall ask is reduced from 800k to 684k by cutting off entire LM allocation (Type1) to borrowers and allocating some to builders (Type2) instead.
  2. Distribution period – Shorten to 6 months from previously 12 months
  3. Add milestones and details on builders’ grant – The builder’s grant will be allocated to the integrations partner on FCFS basis with more allocation ratio given to the protocols committing to integrate with us before the grant is approved. We target at total of 3 integration partners within 6 months with 2 protocols now committed to integrate with Homora V2 on Optimism.
1 Like
30

From the above update Homora V2 x Ironbank Cycle #8 proposal revision

We’d appreciate @mastermojo revision on changes and we are looking for a total of 2 delegates approval to proceed on [REVIEW] stage of cycle #8 @linda @katie @ScaleWeb3 @fig @ScaleWeb3 @GFXlabs @MoneyManDoug @david @MinimalGravitas @Gonna.eth