DCP-11: OP incentives for dHEDGE pools

Header Content
Author Taminater (@taminater02)
Created 2022-11-8
Status Draft

Motivation

180,000 OP tokens have been allocated as an incentive for investors into dHEDGE pools on Optimism. This proposal sets out minimum criteria and the application process.

Description

To ensure these rewards are allocated to pools that benefit the overall growth of dHEDGE below are a set of minimum criteria:

  1. Minimum AUM of $10k
  2. Pool creation date at least 4 weeks old
  3. Recently active - 2 months
  4. Be public pool
  5. Pool must include a fee, a minimum of either 5% performance fee or 1% management fee

In addition to the above, individual Managers will complete an application process where they submit their pool to dHEGDE DAO via Discord for approval. This will be done via creating a new post in the governance channel #application-for-op-incentives on Discord. During discussions these pools can be voted for or against via Discord. To ensure safety the final say is from dHEDGE core contributors.

180,000 (is to be allocated to pool incentives over 6 months at a rate of 30,000 per month.

Implementation

The 30,000 OP per month will be distributed pro rata directly into each pool daily, calculated based on percentage of total eligible TVL.

EG

Stablecoin Yield = $2M in TVL
Total Eligible TVL = $2.7M

So stablecoin yield would receive 740 OP per day

Based on current OP price of $1.28 this equates to a bonus APR of around 17%

This will increase the performance of each eligible pool and therefore increase each investor’s ROI.

Toros Vaults that will be included initially:

  1. Stablecoin Yield
  2. Ethereum Long Volatility
  3. Ethereum Covered Call
  4. Ethereum Yield

Excluded pools

dHEDGE treasury pools as these are both private pools:

  1. dHEDGE Treasury Conservative

  2. dHEDGE Treasury Aggressive

SNX Debt Mirror (dSNX) as this pool is currently a free service provided to SNX Stakers and therefore does not generate any fees to the dHEDGE Protocol.

Vote

Vote will go live in 2 days

Would be great if the Lyra options pools were co-sponsored with $LYRA token

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