Create a yHEGIC vault to buy stake lots and participate in governance.
Should this proposal be implemented, a yHEGIC vault will be created and used to buy stake lots on the HEGIC platform. The generated fees would be used to compound by buying more HEGIC.
HEGIC’s tokenomics are well designed and have great potential, and their main purpose outside of governance is to use in staking lots. By staking these tokens, the stakers gain fees generated by the platform during options purchases. However, the number of tokens required to purchase a lot is quite high and outside of many users’ reach, locking them out of the opportunity to participate.
Should this proposal be enacted, a yHEGIC vault would be created. This vault would accumulate HEGIC tokens from users’ deposits until enough has been acquired to purchase a staking lot with spare HEGIC tokens remaining. At first, this amount would be 1.2x the 888,000 HEGIC required to stake. This spare amount is to allow some extra liquidity in case a user wants to withdraw, as withdrawing from a staking lot requires 7 days to clear. Once enough staking lots have been purchased and the vault grows in size, this will change to 10% of the total vault in reserve. If a user’s withdrawal exceeds the amount in the reserve pool, stake lots will be sold in order to achieve the required value. At this point, withdrawals will be halted while the vault processes the unstaking, but deposits will still be open. Once the pending withdrawal clears, the vault will reopen to more withdrawals.
Stake lots will be purchased to achieve exposure to all asset types (at first ETH and BTC), starting with ETH. Once all asset types are achieved, the vault will buy new stake lots based on whichever will achieve the highest ROI. The collected fees from these stakes will then be sold for HEGIC and compounded into the vault. These proceeds are calculated as a percentage of the total number of stake lots for that asset, so by increasing the number of lots owned by the vault, the profitability will also increase.
This vault will also participate in governance, using this strategy.
For: Create a yHEGIC vault with the above strategy.
Against: No change.