The KPI tokens were distributed weeks ago, so I believe it’s now a good moment to further discuss details on how the distribution would be done.
At the time of writing, the KPI options were distributed in the shape of wDough-kpi tokens, to later be redeemed as veDOUGH based on the ratio defined by the KPI on Staking considered.
The reason for choosing veDOUGH vs DOUGH as the asset for redemption of the KPI Options lies in the clear intent to avoid flooding the DOUGH circulation supply with up to 5m tokens at the moment of conversion. This would in fact invalidate the whole case built around the creation of incentives in order to pursue a higher % of staked DOUGH out of its entire circulating supply.
The possibility to have the KPI Option backed by veDOUGH was somehow aired since the very early convo held with the UMA tech team. Unfortunately this wasn’t possible with their standard contracts, consequently the initial proposal posted on the PieDAO forum referred to DOUGH as the asset backing the KPI Options. Same for the initial snapshot vote signaling support by the community for this initiative.
As part of the discussion triggered by such proposal, the community has been further exploring the possibility to still get veDOUGH as asset backing the KPI Options, requiring the development of a wrapper taking care of converting the KPI Option to veDOUGH at expiration. This solution was eventually conceptualized and developed shortly after by the core team for the reasons above.
In order to avoid gray areas on which should eventually be the asset to be distributed at expiration of the KPI Options, I would propose to the community to formally select one among the 3 following solutions:
A) Options redeemed as veDough
B) Options redeemed as Dough
C) User to select either A or B at the moment of conversion
Option A) corresponds to the current implementation of the KPI Option, developed by putting the above mentioned wrapper in place that allows options to be redeemed automatically as veDough. Main benefit of this option is undoubtedly the possibility to avoid selling pressure on our governance token DOUGH, while at the same time incentivizing the long term alignment from our community members to PieDAO.
Option B) Options redeemed liquid as DOUGH, with the main downside being its dilution and negative price impact, and the extra cost for those willing to eventually stake those tokens to veDOUGH.
Option C) User would select either A or B at the conversion of the KPI Options. This would provide the option to allow each address to choose whether or not to stake their tokens, with unknown effect on the DOUGH Circulation supply and price.
We’d like to discuss in the open what our members think before we put this forward to an additional vote.
- The original Forum post can be found here
- The initiative Snapshot vote can be found here
- The announcement can be found here
- The UMA contract mention in the initial snapshot changed from 0x79b6BD0FC723746bC9eAEFeF34613cF4596E6dEF to 0xdfD82bF0e1CEEC9740B9004A0921a5DE61D3557E to reflect the effective timestamp of conversion to be considered