V2 Locker Proposal

Proposals
#1

This is a proposal to replace the current CNC locker with an updated v2 CNC locker. On Thursday, August 4, 2022 6:27:14 PM (GMT) the first locked CNC will unlock in the Conic locker. This would be an appropriate time to shutdown the v1 locker, which would release all locked CNC, and subsequently introduce the v2 locker.

The proposed design of the v2 locker entails the following:

  • Support for accrual of CRV and CVX platform fees for vlCNC holders
  • Reward vlCNC holders that locked in the v1 locker
  • Add incentives for Conic LPs to lock CNC

v2 Locker

The v2 Locker redesigns several components of the v1 locker.

Locking

The locking period can be decided by a user and must be a minimum of 4 months and a maximum of, e.g., 8 months (the max. locking duration should be discussed by the community). Hence, users may also lock for any duration in the range of 4 to 8 months (e.g. 21 weeks). The v2 locker also supports relocking. A user may relock all or one of their locks at any point in time.

Fees

Platform fees for vlCNC holders cannot be introduced with the v1 locker. The v2 locker supports CVX and CRV fees to be claimable by vlCNC holders. Note that Conic platform fees are not enabled by default, but will need to be passed via Conic governance.

Boost

There is a boost factor for CNC lockers, which will determine the vlCNC balance of a user. The vlCNC balance determines how much voting power and fees a vlCNC holder receives. The boost factor is constant over the lock period for a given lock and is dependent on two factors: the base boost factor and the LP boost factor.

Base boost factor

The base boost factor determines the vlCNC-t (vote-locked CNC total) balance, which is the balance that is used for both voting and fee earnings. The base boost factor is determined by how long CNC holders lock their tokens for, where the boost factor is proportional to the duration of the lock. The default base boost factor is 0. Hence, if no CNC is locked, a user cannot obtain a vlCNC balance, regardless of the LP boost factor (see next section).

LP boost factor

The LP boost factor gives a boost on the vlCNC balance, which is only used for voting (i.e. no extra fees are earned on the boost). Conic LPs may stake their Conic Omnipool LP tokens to receive a LP boost factor. The boost factor obtained from staked LP tokens only boosts the vlCNC balance for voting. The default factor for LP boosts is 1.

Final boost factor

The final boost factor of a user is the product of the base boost factor and the LP boost factor. For voting, the boosted balance will be the final boost factor. For earnings, the balance will be the base boost factor.

Note that the boost factor may vary between multiple locks created by the same user.

LP staking

LPs can stake/unstake their LP tokens at any point in time. The vote boost factor will increase linear with time (1 month). Taking into account the USD price (as non-USD stablecoin Omnipools pools may exist) and the percentage locked of the total LP token supply.

Penalties

If a user does not interact with the locker after their lock has expired, the user’s boost factor may not be accurate. Hence, there is a kick function, which may be called on users that have expired locks once the grace period has ended. The caller would receive a share of the earnings that were generated since the lock has expired.

v2 Locker launch

The launch will contain an airdrop of the vlCNC boost to:

  • Users that locked CNC in the v1 locker
  • veCRV holders

This airdrop would not be a token, but rather a boost on a user’s locked CNC balance (on the final boost factor). The airdropped boost would apply for every lock that is created by an eligible user within one month after claiming the airdrop. The airdrop must be claimed within the first 3 months after announcement.

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The Conic Governance Model
#2

Looks, good. Is the protocol expected to be deployed before or in tandem with the v2 locker? Not trying to be price or short-term focused, but my only concern would be having a ~50% unlock before users can utilize the protocol.

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#3

I’m a fan of the boost for v1 lockers, it’s good to reward early believers in the project.

Keen to learn more about how the accrual of CRV and CVX fees will be accrued, I’m assuming this will be with fees earnt via the platform itself?

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#4

The protocol would be deployed before the v2 locker

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#5

Appreciate the flexibility of lock time, in particular being able to relock all locks simultaneously, so one can sync lock expiration dates.

Will this voting power be for both omnipool distribution AND governing proposals?

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#6

All in all this sounds pretty nice. I hope the kick-function’s grace period will not be too short, though.

Just two points that I wanted to address:

1

Regarding the launch of the protocol. Is the audit still ongoing? Or is it “done” and the feedback from the auditors is used to tweak the last bits? Do we have a target launch date or do devs want to keep a little flexibility concerning the launch?

2

Regarding the “boost airdrop”. I have witnessed quite a few airdrop scenarios in the past. Worst scenarios were where mercenary capital sniped the airdrops and “real” early supporters were punished. The proposal sounds a little bit like anybody who vote-locks CNC on the last day of the v1 locker gets the boost, too. Which is kind of weird because then you could buy CNC 1 day before v1 is retired, lock it for max duration, claim it when v1 goes out of business and then lock in v2 with max boost. Is this assumption correct? Also, is the “boost” averaged around all the people who locked? Or is it just “you locked in v1, here is your 2x boost” to everybody and then the fees (CRV and CVX) that actually can be distributed will be distributed proportionally? I think a more sensible approach would be a tier’ed boost based on the amount of time locked. Something like

B = n - ( p / d )

where
B is the final boost factor that will be airdropped,
n is the max boost factor,
p is a “penalty”-weight that can be chosen based on n and
d is the amount of days locked in v1.

This way the “penalty”-weight gets less and less severe the more days you locked in v1. Mercenarys in this case would be maximally punished since they only locked one or two days.

Best regards

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#7

This is a really cool concept, where rather than being concerned about how big one’s bag is, how committed to the protocol a user is. I like the thought of maybe even going one step further where you’d factor in the percentage of the airdrop a user locked.
For example, if you simply add to the right side of the equation: (user first lock size / airdrop size)
or something along those lines. If they didn’t get an airdrop, it’d just be a boost boost of zero.

But it definitely seems like it would need to be certain that there wouldn’t be a way to game the conversion to the new contract. Maybe even something as simple as using a snapshot from just before this proposal was posted would alleviate the risk of mercenary capital cleaning it out without committing to the project.

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#8

Yes, the earnings to be paid out to vlCNC holders would be the platform fee that is charged on CRV and CVX rewards earned by Conic Omnipools.

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#9

Yes, it will be for both.

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#10

Thanks a lot for your helpful suggestions.

To address your comments:

  1. We have not kicked off the audit yet. The reason is that we wanted to first find a better mechanism of pricing Curve LP tokens (which we have), as this is a fundamental component of Conic. The aim is to have the protocol public before v1 locks expire.

  2. Agreed. There should be a mechanism preventing people to execute “last minute” locks only to then receive a boost airdrop. We have not yet fully decided on how to best address this, but your suggestion could be a nice solution.

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