[AIP-17] - Handling of extra ALPACA tokens from the AIP-15 incentives


Per AIP-15.3 and AIP-15.4, the community has decided to allocate a total of 1,750,000 ALPACA as incentives for the Perp and AF2.0 product launch. ALPACA were to come from various sources

February Emission:

  • Per AIP-15.5, the community has also voted to use February emission as part of the incentives rewards. In total, 350,381.7 ALPACA was collected. (TX Proof)

Unclaimed ITAM rewards:

  • Per AIP-1, the last day to claim ITAM rewards was 15 March 2023. In total, there was 1,542,758 unclaimed ALPACA (TX Proof)

The whole balance from the two sources above (1,893,140 ALPACA) are now collected in this wallet address: 0x09d25b4e72132183eb05d6c4da2b7533e178a0ae.

Liquidation Treasury:

  • Currently, we have 305k ALPACA + $2.7k USD in other assets in the liquidation treasury. ( Address)

Early Withdrawal Fee:

  • Currently, we have 271k ALPACA in the early withdrawal fee wallet. (Address)

Based on the info above, we have more than required ALPACA for AIP-15 from the liquidation treasury, early withdrawal fee, and Unclaimed ITAM rewards. Extra ALPACA (~370k ALPACA) from these three sources will go towards weekly burns over time.


This means the entire amount (350k ALPACA) from February will not be needed for Perp and AF2.0 incentives. And as stated in AIP15.5, the community will get to decide what to do with this portion of ALPACA.


This AIP will be a single-choice voting. There will be two voting options:

  1. Burn - The entire Feb emission amount will be burned.

  2. Reserve for future initiatives / product launches - $ALPACA will be kept in a multi-sig wallet, and deployed in the lending vault. The community will then decide again in a future proposal how to use these as incentives.

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I’m not sure I like what I’m proposing but what if the treasury liquidity is invested into ALP?
I would not love the sell pressure on the token to convert ALPACA into ALP but we can do it gradually.

Another more risky but useful alternative could be to convert the treasury into liquidity for our ALPACA-BUSD pool

Personally, I think it should be used for future incentives such as the AF2.0 launch. I’m not sure how much is remaining in the Alpaca warchest but I believe that should only be used as a last resort.

I do not think it should be sold or burned.

I wouldn’t want to see our precious ALPACA reserves being sold for ALP currencies, because I believe (or rather hope) that ALPACA will moon one day when people really discover/appreciate its intrinsic values.

Liquidity provisioning for the ALPACA-BUSD pool is similar to selling, but only half of it (at the outset), and it would be put to a good use. This option is better but I’m not fond of it either because it also means selling.

Burning should actually be good for the price in the long run but it’s too uncertain to depend on. In the short run, we would simply lose them.

So, I think I’d prefer to keep those ALPACAs for future product incentives such as AF2.0. The lending vault is a good place to store them so they generate some interest, although it’s not much as the vault is not really used much.

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