[AIP-20] Aligning AF1.0 lending performance fee structure with AF2.0

Alpaca Improvement Proposal (AIP) Protocol Parameters
1

Background

This topic came up as part of the discussion on AIP-21. However, this issue can be voted on as an independent AIP.

Rationale

To increase the yields of Gov Vault and offset impact from the changes in bad debt repayment (AIP-21), we can redirect a portion of Burn to Gov vault to help boost the staking APR%. Please note that we already do this to some extent for AF2.0 where 6% (of the 19%) of the lending performance fees goes to Gov vault. We could apply the same structure on AF1.0 as well. Given there is no new ALPACA emission, the token will always be in deflationary and reducing the burn portion slightly wouldn’t have a big impact.

Implementation

If passed, the new lending performance fees of AF1.0 would be changed to:

  • 6% to Governance Vault
  • 4% to Buyback and Burn

Voting

This AIP will be a single choice voting.

  • A YES vote would change the AF1.0’s fee structure to align with AF2.0
  • A NO vote would leave the lending performance fee of AF1.0 as is.
4 Likes
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Gov vault stakers are the most committed backers of the protocol. Anything to incentivize the vault is good for the protocol in general.

1 Like
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What is the current fee distribution?

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Currently all 10% goes towards buyback and burn.

2 Likes
5

I like this…now that we are deflationary its better to incentivise people to lock than to burn…exponentially more effective at pamping price

1 Like
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This AIP is now live for voting. You have until 11.59PM UTC Wednesday 24th May to vote.

https://snapshot.org/#/alpacafinance.eth/proposal/0x08a3668884f3d0afd8e91d99e9c693dac040d9ccbebcb30598fd7bd3c55838b6

7

if 6% is distributed to gov, will half of that go towards paying back the BNB bad debt?

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The % that will go towards bad bet repayment will follow whatever updated structure the community decides as part of the AIP-21 voting.

During the interim period (while AIP-21 voting is still in progress.) 50% will be redirected to pay the bad debt.

1 Like