[PIP-59] $PLAY Metaverse Index - Prospectus

Following up on the community sentiment emerged from this [thread] (Rebalancing of $Play) regarding the $PLAY rebalancing, I’ve been putting together a proposal of Prospectus for PLAY aimed at clarifying:

  1. eligibility criteria for inclusion in $PLAY (or asset removal)
  2. the methodology for asset allocation
  3. rules and procedure for rebalancing

You can check it out here
Having collected multiple feedback, I’ll be moving this on to a snapshot vote for acceptance.

Next envisioned steps:

  1. Snapshot vote for acceptance/rejection of this prospectus (ETA: 26/08 -> 30/08)
  2. If 1) accepted, Snapshot vote on the inclusion of new underlying assets, if any (or removal of existing assets) based on newly established criteria
  3. If 1) accepted, new $PLAY allocation based on newly established criteria + rebalancing
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This asset tracker is intended to more conveniently monitor how the newly proposed inclusion criteria would impact each of the PLAY underlying assets (actual + potential) .

3 Likes

Snapshot is on https://snapshot.org/#/piedao/proposal/QmXQP6iSPQw2oA5czErUrjbASc97ZVT4BHvtB8g7uXXCM1

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Fantastic to see the proposal being accepted with 100% Support.
What are the next steps for you @gabo?

For me:

  1. Link the Prospectus on the website
  2. Link the Prospectus on the docs
  3. Change content accordingly
  4. Develop bots to automate the triggers

CCing the crew @Adrian.A @Nico @Totohm_Shanti

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Indeed. Prospectus was already linked to the docs, and some issues opened for others tasks.

As next steps, I’d expect to trigger soon an additional snapshot vote aimed at gathering punctual consensus regarding:
-> possible removal of current underlying assets which don’t meet the newly voted criteria
-> proposed inclusion of additional underlying assets which meet the inclusion criteria

Based on the output of such vote, a new allocation for PLAY will be computed, to be eventually adopted during the first rebalance activity.

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Great work @gabo with the whole push! I think this is a great first step for PieDAO, moves that add clarity to how Pies work and make sure of no “zombies” as @alexintosh mentioned elsewhere are important if we want the DAO to grow. I wonder if an additional step would be to create a Working Group rather than bots to automate the triggers / expect community members to suggest rebalances? Perhaps it could be responsible for tasks related to both $PLAY and $PSP?

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Thanks for pointing this out!
The creation of a common Working Group in charge of both $PLAY and $PSP could definitely be an option, even though it may bring some complexity in the KPI option creation, being TVL driven.

But I agree many synergies could be explored between the two pies both on Business Development and “Operations” (e.g. Working Groups should be progressively taking on all tasks related to the rebalancing of Pies).

You can find here an updated version of the $PLAY asset tracker recapping how both current underlying assets and newly-proposed assets align to the voted criteria for inclusion defined in the Prospectus.

Here the outcomes of such analysis

Assets currently included in $PLAY but NOT fully meeting the criteria

  1. $RARI - Rarible:
    -> No formal audit performed on the token, which slightly deviates from the ERC20 standard, being pausable.
    Despite of this, token seems broadly accepted and included in all indices tracking the Metaverse.

  2. $ATRI - Atari:
    -> Un-sufficient liquidity on DEX (approx $200k scattered among UNI v2 & v3).
    -> No formal audit found on the token
    -> Token is not fractionable by design (ERC20 with 0 decimals). This issue was so far mitigated by employing a wrapped version of the token ($wATRI), which anyhow creates complexity when buying tokens through the recipe for minting new $PLAY, since only integer units should be bought.

NEW Assets proposed to be included in $PLAY since fully meeting the criteria

  1. $ILV - Illuvium https://www.illuvium.io/
  2. $AUDIO - Audius https://audius.co/
  3. $ERN - Ethernity Chain https://ethernity.io/
  4. $GALA - Gala Games https://app.gala.games/

Through this snapshot vote, the PieDAO community is called to express its preference on each of the assets mentioned above, regarding:
a) its REMOVAL from $PLAY during the first rebalancing, for each asset currently part of it but not satisfying all criteria
b) its INCLUSION in $PLAY during the first rebalancing, for each asset proposed by the community which meets the inclusion criteria

Here’s the snapshot vote to signal your preferences https://snapshot.org/#/piedao/proposal/QmWw21mShD2EPtWd9tzy7ZFrz9pLVwTHsBmnrNbQ1mcJ42

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Great analysis, and engagement on the snapshot. I believe we’re all set for rebalancing and updating the pie, aren’t we?

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Considerations on current PLAY allocation

Hey all, sharing here some personal considerations on the current PLAY allocation, its limits and potential.

  1. Several items compose a “long tail” of not very meaningful allocations (the sum of 9 smallest allocations account for 10% of PLAY in total), despite having introduced a min 2% allocation for each asset during the past rebalance

  2. The thin liquidity available on DEXes for several assets is representing a concrete bottleneck for the minting of decent-sized batches of PLAY (issue is encountered for any minting > 10 ETH of PLAY). Furthermore, for some assets with most of liquidity on Uniswap V3, this can result even more challenging due to its range-concentrated allocation.
    The need to limit the size of each batch exponentially boost up the gas cost incurred when minting liquidity for PLAY.
    NOTE: the minting of PLAY for last SLICE distribution turned into a nightmare 'cause of this liquidity issue, incurring in some quite important slippage and high gas cost for the required minting across multiple batches.

  3. Liquidity shouldn’t represent such a big deal for a high-potential product like PLAY, given both its recent performance and the hype consolidating around the Metaverse space: PieDAO should urge to turn PLAY into a winning product, positioned on multiple venues (L2 included), ideally also leveraging on some professional support for its market making (MM). Note that PLAY is quite a complex product to MM, again given its long tail which makes hedging almost impossible for the majority of its underlying assets.

Proposed action points

A possible way to address most of these issues would IMHO require the following action points:

-> Remove all assets with negligible liquidity on DEXes, also capping the allocation of each asset in order to always keep its slippage below 2% when minting PLAY. (this by making each asset’s allocation also a function of its DEX liquidity)

-> Drastically cut the current long tail mentioned at point 1, getting down to 8 underlying assets total

Below the relevant data considered

The computation of the above aspects as part of the allocation methodology would suggest the following output to be up to vote:

Resulting in this final allocation for PLAY
Screenshot 2021-11-26 at 04.51.29

NOTE: This resulting allocation was optimised in order to mint up to $1m in value of PLAY in a single transaction, with a total slippage of 0.75% (target < 1%)

You can consult the full sheet here.
Looking forward to collecting as many preliminary feedback as possible, to eventually assess the general sentiment of this proposal through snapshot vote.

3 Likes

I don’t feel great about losing all the NFT exposure.

I confess neither do I. Still the low liquidity of most NFTs is truly undermining the PLAY scalability as a whole.
Maybe a wiser option could be to reallocate NFTs in another product (PFP?).

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A snapshot vote was posted here https://snapshot.org/#/piedao.eth/proposal/0x4c303cfd761e57701d1284029905e8c06448f56b184cc583ab40915fe783bd77

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+1, would love to continue to hold some exposure to Punks/Socks/Masks in something like PFP.

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Thinking about this more, we are early and out to be doing our best to scale the products and access to them. PLAY stands good chances IMO, and I find myself in support of the changes.

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Last version of $PLAY asset tracker available here

Prospectus here

1 Like