PIP 18: Farm and sell competing yield for DOUGH

I propose the DAO allocate 25% of the ETH in it’s vault (currently $600,000) towards being a yield farmer of competing projects. The DAO would mint a competing protocol’s token (starting with $DPI) and stake it to earn yield rewards in the protocol’s token ($INDEX for $DPI). The DAO would redeem these yield rewards daily and sell them for ETH which would then be used to purchase $DOUGH off the 80/20 Balancer pool. The $DOUGH purchased would be deposited in the DAO’s vault for future use.

This program is designed to have PieDAO be one of the largest LPs at the beginning of any competitive pool with yield farming. As a result, these competing (or cloned) projects would have a positive impact on the price of $DOUGH, benefiting both the DAO members and the DAO itself in the long run.

I further propose a farming committee, consisting of 2 core team members and 3 $DOUGH holders be elected to manage a multisig with the agreed funds. This will allow fast decisions to be made should the yield no longer be worth the farming.

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Second.

mh, what about harvest.farm?

Use the mined FARM tokens to increase the influence on the harvest.farm platform, make them support DOUGH & product tokens on a high level.

We could mine for influence too, but my proposal is specifically about engaging in a form of vampire farming of protocols that copy or clone our concepts. I look at it as a way to counterbalance the lack of defensibility in this space.

Whales and funds already do this for their own gains.

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It would be an interesting experiment, start with anti-vampirism them move to a more sustainable farming operation for value accruing of DOUGH sounds great to me.

What’s the proposed multisig 3/5 or 5/5?

A yVault / Harvest Vault btw would easily do that I believe

3/5

I was thinking about this last night when I couldn’t sleep. :smiley:

From my short time in the community, it seems like the dao’s lazer focus:

  1. maximising long term sustainability of the dao and its membership
  2. maximising returns to the membership

With those goals in mind, wouldn’t we be better to instead focus on where the highest returns can be made?

Btw, I really like the idea of this ever growing pie of DOUGH that allows the dao to wield ever growing influence and earn bigger rewards. It seems like a pure win.

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I think this committee could focus on both. I mean, I hope we don’t have so many projects copying what we’re doing that we could take the vampire approach indefinitely.

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That being said we should consider reducing the allocation from 25%. If we are going to pull operation vampire I cant imagine INDEX being the only other competitor in the future. We should have more ETH to allocate to these projects at our disposal. Just a thought.

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We need to consider the risk when pooling ETH with volatile assets like DPI. If DPI (or another assert in that place) goes down sufficiently and the farming rewards are not high enough, then we lose.

If there are yield farming strategies with ETH only, or stable coins, then this could be considered with low risk. The risk in that case would only be the smart contract itself (which exists everywhere).

Even under low risk scenarios, I’m not sure if we should follow this path and leaning towards a no. Generally, I think what we should not over-index in dealing with competition and should invest our energy and time in delivering the best possible product. The field is young and there will be space for multiple players.

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Absolutely second this, one interesting addition to the dynamic would be that when farming is not profitable anymore we can unwrap DPI and mint DEFI+L then let people who are interested in owning it buy it for ETH so they don’t have to sustain gas costs.

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I really like that aspect of farming DPI too. Agree that in general we should be careful about assets that are too volatile by nature and avoid pools where the farmed token is part of the pool.

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The PieDAO Yield Farming team is ready to go. We have a brand new multisig located at piedaoyield.eth and 6 committee members to get the ball rolling. 4 signatures are required to execute any votes.

Committee:

@alexintosh signing with 0x857e6FbB7518fe4Fc28667C5581C329f9A571B6c
@mickdegraaf signing with mick.eth
@marczeller signing with 0x46c01D2Bf6998E740B9CcdD7B0680A4E54f7eA90
@scoopytrooples signing with 0x6C39856620df9607d51b630555Cf3fB0dB0b570b
@borovan signing with 0xe4a8dfca175cdca4ae370f5b7aaff24bd1c9c8ef
@lsdan signing with lsdan.eth

The team will have a mandate to farm the most profitable yields possible and use the profits to buy $DOUGH on Balancer. The $DOUGH purchased will be used to provide yield incentives back to the community on an experimental basis. Our goal is to provide consistent upward pressure on for the price of $DOUGH and maintain a sustainable ecosystem of farms with the occasional vampire approach as needed.

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So, I just wanted to share my thoughts on this subject. First I want to give you my understanding of this process (make sure I’m not misunderstanding anything), followed by some questions/concerns.

1.) The BAL Rewards are granted to EOAs that are providing liquidity through Balancer. This is an acknowledgement of initial entitlement to such rewards.
2.) By staking our Balancer Pool Tokens (bpt) within the PieDAO staking contracts, we voluntarily give up the rights to those Rewards on the basis that we are rewarded Governance Tokens (DOUGH) in exchange for providing liquidity for new Pies.
3.) Those BAL Rewards are converted to ETH which is converted into DOUGH and then recycled back into the PieDAO vault where the Governance Tokens are used to incentivize the liquidity for new Pies being created, ad nauseum.
4.) The method of Purchasing DOUGH will be accompanied with the mandate (through the multi-sig controlling the vault) that its core mission is to provide price stability of the DOUGH token.

Question: Is this mandate designed to counteract the assumption that the streaming DOUGH rewards will be Sold back into the market maker at a higher rate than the perceived short-term demand? Do you have any concerns about this practice?

Concern: Initial Members of the DAO/“Whales” : I have noticed that of the almost 300 votes made on-chain, the vast majority of them are 100% Yes (with very similar DOUGH amounts) – with few proposals being rejected due to a failure to meet quorum requirements.

While this is completely understandable, my concern is that early decisions of the DAO (such as unilaterally making the decision to take BAL rewards – and instead of distributing them to LP’s, we issue an artificially inflated DOUGH token) are incredibly important in shaping the future of this project.

I bring this up, not as a slight towards this process, but as an example that when these decisions become standardized as the “model” (for financial portfolios in our case), it forces new users to participate in a governance process that is inflexible to change. (I also understand that this is universal problem for all yield farming projects.)

Now, if you say that this is the only way to make this system sustainable, I will take your word for it. At the end of the day, I want to see PIES because it has true utility for stable long-term financial investments…with that being said, I think that transparency is the ultimate goal for a model such as this. I know most people just want returns, returns, returns, but if your vision is to incorporate fair governance processes of not only PieDAO, but governance of the underlying assets of each PIE, these early decisions (made in a pseudo-centralized manner) should be continually reviewed alongside the growth in the number of DOUGH owners.

This transparency also extends to understanding how much liquidity is being provided to the pools by these initial members of the DAO/“Whales”. They have a significant influence on what PIES proposed by the community get liquidity, how much DOUGH incentives are issued for providing that liquidity.

Anyway, thanks for hearing me out, and I am really excited for this project to succeed.

Note: Apologies for conflating PIP 19 with the discussion here on providing Liquidity for outside projects (although my thoughts can be applied throughout).

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