Request to team: status rKP3R rewards for vKP3R

Hi KP3R dev team,

Creating this post to address ongoing & unresolved query regarding rKP3R rewards for vKP3R token holders. I’d like to request that the dev team provide clarity to the community on current status of rKP3R rewards

To make this post as clear as possible I’m including some context around history of rKP3R rewards & some commentary why this is considered an important issue for vested token holders

Importance to vKP3R token holders & reward info

The KP3R governance token includes a tokenomics model where there is no maximum supply cap for the token.

Although necessary for securing ongoing funding & incentives for both protocols & keep3rs in the keep3r network this does create a disincentive for any token holders considering the option of vesting their token holdings who have to consider the risk of dilution as a result of new token emissions - a particular concern since a vested token holder also has a right to a share of the fees generated by the protocol.

This effectively means that the vested token holders have two ways in which their share of fees can be reduced (outside of protocol revenues declining);

  1. The total amount of tokens in circulation increasing at a rate beyond expectation
  2. The total amount of token holders locking via vesting mechanism increasing

One way in which this risk was offset was the Options Liquidity Mining program which had the following characteristics;

  • rKP3R rewards would be granted to vKP3R holders - tokens which currently offer a 10% discount on the price of KP3R tokens when redeemed via payment in USDC
  • the entire revenue generated via redemption (i.e. all USDC payments) would be directed to vKP3R holders as revenue paid out bi-weekly alongside all other fees

This is a key benefit for token holders that chose to invest & a unique selling point of the Keep3r protocols since it effectively compensates vested token holders against dilution of their position by monetizing the new token creation process and providing fees directly to vKP3R as well as allowing each vKP3R holder to increase their overall holding at a discounted rate - ensuring that they have an opportunity to maintain a similar level of claim on protocol fees.

In respect to this post, we should consider these as aspects that have driven token holder behaviour when choosing to vest their tokens for a period of upto 4 years in length. Average token lock duration is currently sitting at a little over 3 years

As already shared in my previous post total emissions of new KP3R have already exceeded the expected rate by around 8k more KP3R in circulation than anticipated by the point in time that the Olympus Pro Bond program came to an end. This has further impact on vested token holders that is being exasperated by the fact that rKP3R rewards to vKP3R stopped as of w/c 14th of March

rKP3R rewards to vKP3R were running at a rate of upto 1k per week which is confirmed in this message from the moderator team of the official telegram group & were distributed to vKP3R holders weekly prior to this point in time

Under the previous communications channels it was also clarified by Andre that rKP3R rewards for vKP3R holders would stop upon implementation of ve(3,3) tokenomics . Although it now appears rKP3R rewards stopped whilst ve(3,3) has not been delivered as of yet - this is an important point since ve(3,3) would further address the concerns about dilution for vKP3R holders

It’s clear at this point that the intent is to continue with rKP3R rewards to curve gauges for the foreseeable future which would further impact vested token holders in the ways described above

Conclusion & Ask of keep3r team

Please can the dev team look into this query and provide a responses that address;

  • whether rKP3R rewards to vKP3R holders have been stopped intentionally or whether this is an oversight?
  • if an oversight, whether rKP3R rewards will be backdated for vKP3R holders to week of 14th March?
  • if restored, what new rate of weekly allocation to vKP3R will be maintained given the planned allocations to new curve gauges for ibAsset + USDC pairs?
5 Likes

it’s probably also worth noting that stopping rKP3R rewards to vKP3R has likely had an impact in decreased revenues from OLM for the protocol since this is impacted by two factors;

a) the price of KP3R which will heavily impact the revenue received from rKP3R redemptions since lower price will mean lower revenues & higher price will mean increase in revenues assuming the same volume of redemptions

b) volume of redemptions which is directly impacted by a reduction in the amount of outstanding or new rKP3R issued. rKP3R issuance is likely down since a total of 2k per week was being directed to rKP3R with 1k to Fixed Forex gauges & 1k to vKP3R

An additional (third) impact factor would be that simple liquidity farmers unaware of the mechanics of KP3R’s OLM are likely lacking the awareness to execute redemptions. This is not a concern for rKP3R held by vKP3R holders

2 Likes

Adding a vote for vKP3R holders to include their sentiments

  • rKP3R rewards for vKP3R holders should be restored & backdated to w/c 14th March
  • rKP3R rewards for vKP3R holders should be restored & backdate forgiven
  • Satisfied that rKP3R rewards for vKP3R holders should have been ended w/c 14th March

0 voters

2022-04-19T00:00:00Z2022-04-22T00:00:00Z

2 Likes

The team hasn’t responded in months to many well written proposals.

There’s been no notification from the team, even after Andre left.

Is this a joke? Is anyone still working on this?

There is v2 distribution in works but it’s not quite done yet.

5 Likes

Thanks for response. Can you share a bit more detail on what V2 is? Does this mean V2 of OLM (including rKP3R > oKP3R > KP3R process)?

this project is great and we have an interested community please ask for a more active information channel

1 Like

New rKP3R contract fixes UNI v3 TWAP issue where it bricks claims larger than 50 KP3R + reduces number of steps leaving only claim() (removes options, basically).

3 Likes

Thanks for further clarification. Sounds good & definitely a supporter of a more simplified claiming process.

However, most vKP3R are more than familiar with the redemption process at this point. What prevents rKP3R from being restored for vKP3R rewards on the current contract?

More than happy to provide support comms on claiming in batches of 50 or lower if it’s helpful to the community.

Does this issue also affect rKP3R rewards being provided to curve pools? If so, why are we maintaining these whilst stopping rewards for vKP3R?

I think this is quite a significant issue as the protocol currently has a significant dependency on OLM revenue. rKP3R rewards are still in place for curve pools under the current system, so it’s not a case of revenues declining to zero but clearly, there would be an immediate benefit & increase in OLM revenues for protocol if restoration of rKP3R rewards for vKP3R was enabled immediately.

Note, revenues from OLM have historically been the highest revenues stream for the protocol with revenue & share of revenues as follows;

  • Sept 21; 7.3% of total revenue (total rev = $124k, OLM = $9k)
  • Oct 21; 39.3% of total rev ($319.9k, $125.8k)
  • Nov 21; 80.3% ($1.69m, $1.35m)
  • Dec 21, 74.7% ($1.56m, $1.17m)
  • Jan 22; 69.9% ($1.69m, $1.18m)
  • Feb 22; 65.5% ($1.14m, $745k)
  • March 22; 77.6% ($820.5k, $636.6k)
1 Like