I would go for Option 4. New products may or may not succeed with or without new token incentives. Launching new products without new token incentives is maximizing the sharpe ratio. If new products launch and failed, so be it. It might fail with token incentives as well. What can be predicted by the market is that if products launch with tokens, alpaca token price plummets before any dilution even hits the circulation.
[For Discussion] Potential adjustment to ALPACA tokenomics to support upcoming (Perp, AF2.0) and future product launches
Companys doesn’t issue shares that hey aldready issued and don’t own?
Hi alpacas, anyway we are here at this moment, Merry Christmas to the team and everyone
Here is my perspective as a long-term Alpaca holder (since launch):
I myself was initially attracted to ALPACA only for its high emission rates. As Sam mentioned in the earlier post, these ‘paid’ for the time I spent learning how to leverage yield farm. As the incentives dropped, I continued using the platform due to this familiarity with the mechanics.
The trust in the Alpaca team (carefulness, low inflation, communication & continued development) made it so that I still maintain a large position of ALPACA, which I do not do for other farm/protocol tokens.
I believe that for new product launches, this initial ‘high’ emission structure is critical to attract and teach new users initially. But, this does not need to be as high as the first time, nor does it need to last longer! These new products do not have a large learning curve associated with them. Furthermore, the Alpaca team has built up a lot of trust, and a sizeable community.
In summary, I believe that ALPACA V2 is the right direction, but that the proposed inflation rate is too high, and does not reflect the needs of the new products. I support ALPACAv2 if the inflation rate is at a maximum of 8% in the first year, and 5% or lower over the following years (inflation after burns).
I am happy that this is such a lively and constructive debate and thank the community and Alpaca team for that.
There seem to be more balanced responses in the last few days. I want to clarify that if there is anyone who supports options 1/2/3, please make your voices heard within the next 1-2 days here by commenting, or we will move forward with a Part 2 of this discussion without these options, as a result of having received mostly negative responses for these at the top of this thread. It will be the last opportunity for you to do so on these options specifically, thank you.
I prefer Approach #4 because I believe that Deflationary mechanism is best for long-term value. It maybe low revenue in Bear market but don’t forget that Perp and ALPACA v2 are created to best serve users in shorting positions in Bear market (shorting paradise). This will create higher revenue for the team and all ALPACA holders through more buyback.
The best thing to do is creating value not inflation (Approach #1-#3 is creating new token or increase supply). To create value, ALPACA should focus on making the new products more easily to use with new users (Ex: traders) and incentives LP providers through platform fee. This is suitable for the new trend Real Yield.
Finally I choose Approach #4 and I believe every user here would choose that too.
Before deciding using current revenue to promote the new products, I think we should wait until team announced further information about Perps or ALPACA v2. I saw some Perps product in DEFI already, they mainly incentives the LP providers through platform fee when users trade, not using tokens for reward. So I believe it is based on how much good the team build the perps product and how many tools they provide users to attract more users using our platform.
I want to ask. In the ALPACA v1 tokenomics, there are already WARCHEST and DEVELOPMENT FUND for dev team. Why you guys ask for another part for DEVELOPMENT FUND and WARCHEST again in v2? Is it too greedy? You sold all ALPACA in v1 to gain profit and now you want another part of tokens in V2. This proposal really scare all the investors.
Thanks for the feedback. We’ve announced the details of Perps and AF2.0. You can read the articles in the links provided.
Emissions on ALPACA will expire in a few months. If you read my posts in this thread, I stated that the current revenues are enough to cover our current operating expenses but not enough to support marketing/growth incentives of new products.
We can and are exploring using more of the Warchest, or revenues to Governance for this. These alternatives were suggested by users in this thread, but the Warchest is finite. Each ALPACA used from the Warchest is permanently gone, and we need the Warchest to last for years because it supports some major operating costs. The Warchest can support 1 or 2 new products, but will run out after 2-3 years at that rate. So the proposed ideas here were for how to create a support structure for 10 years of innovation.
As for your comment at the end, “Is it too greedy? You sold all ALPACA in v1 to gain profit and now you want another part of tokens in V2.” - I’m going to warn you for Fudding now. Next one gets a suspension. To respond to this, most of my ALPACA from emissions, and also revenues, has and continues to go to paying staff, which has been the case for a long time.
So when I see someone not only assuming but blurting out something like this, all it does is create a toxic environment.
If the issue is the 9% portion going to Dev Fund in options 1/2, we can even remove that. It would just mean that there would be fewer people to support the new products. I’m pretty confident 0 of that would end up as personal earnings.
In any case, since there hasn’t been sufficient support for options 1-3, we will strike those from consideration.
I am longterm Alpaca holder and I believe in the protocol. I am glad that Alpaca team continue to innovate. Imho, (pancakeswap) v2 liquidity pool farming is coming to end as V3 type is overall better.
If alpaca team thinks, that new token is needed, then be it. New products have great potenical and I support launching them with incentives.
Upgrade a contract thats is not supposed to be upgradable (by changing it to v2) will be a huge red flag for current an future inverstors. Personally i avoid to invest in those projects.
Having a new token every times there is new product isn’t good for the Alpaca Brand, having a community or even making a marketing action.
I strongly recomend not to change the essence of Alpaca. (Security, Transparency, Innovation, Fairness)
That said is true that funds are needed in order to make developoments and growth
The I&D should be sustainable over the time.
Some ideas to analyze are:
Boostrap the developments.
Down the % of buyback (but keep it deflacionary).
Take a loan.
Make someting like a bond tied to the new product . Allow to deposit busd/bnb in a pool. The ones who make the deposit get they money back plus a fixed interest thats paid only with the profits of the new product. Once the bond is fylly paid the revenues starts to go to the governace vault & buyback and burn. The new investor take the high shield high risk. The early alapaca adopters takes no risk. Just get the revenues only if the project works and the “bonds” are fully paid
I think we should make a threat to branistorm how to rise funds without damaging the project
Great work. KEEP BUILDING!
Thanks for sharing the ideas at the end. As for the first part, I need to correct you on a core misconception.
Upgradeable contract doesn’t mean the business proposition/logic of the contract cannot be updated. It means the specific smart contract, as a code restriction, cannot be modified, so you have to migrate to a new contract. The reason contracts are sometimes made non-upgradeable is a design choice based on security, not sending a message that there will never be newer versions of the contract. For example, we are updating Alpaca to Alpaca Finance 2.0 with better features, which requires a contract upgrade.
Here are some examples of protocols you might use which also had non-upgradeable contracts that were migrated to new versions: Pancakeswap, Uniswap, Sushiswap, Compound, Venus (I think), the list goes on.
I am supporter of option 3
Look guys. We don’t affect alpaca’s inflation and we will get %30 of the perp tokens which means we will get %30 of the perps revenue with locking alpaca
Also burns will continue. Only option that makes both devs and community happy is option 3…
I’m a bit late, but this is a big one!
I understand the reasoning behind considering an additional emission or new token to attract new users, but it is such a poor deal for those already involved in Alpaca.
Option 1 would require us to accept a voluntary haircut of almost 50%, even if it is spread out over 10 years, with no guarantee of success in attracting and retaining new users once the incentives start to decrease.
Option 3 would split the community and dilute the rewards for all participants, and may set a precedent for future updates being spun off into separate side projects, further diluting rewards and dividing the community as new projects and ideas are developed.
Option 2 combines the drawbacks of both options 1 and 3.
Again, I understand the desire to attract new users and incentivize their participation, but there must be better options available that do not involve accepting significant losses or splintering the community. For instance, we could halt the burn for a set duration and redirect all profits to the war chest to create further incentives for new products (or replenish if afterward), rather than blinding throwing with incentives and accepting a haircut without any guarantee of success.
Hi all, I also appear to be very late on this one and I admit I have not read all 119 comments, but I agree with the first few leaning towards keeping the status quo.
Historically, Alpaca Finance has never focused on hype/speculation, rather building the core product from the ground up and growing organically. That is why I have been a huge believer of the product, dollar cost averaging and holding for over a year now.
One potential solution is allocating a larger portion of the AF2.0 and Perps exchange revenue towards development/marketing initially, and shifting that revenue towards xAlpaca and/or buyback and burn over time as the protocol grows.
Lastly, based on what I understand about AF2.0 and the perps exchange, they are exciting products in their own right. Personally, I believe they will be able to grow organically without any sort of huge marketing push/hype.
Therefore, I do not see the need to permanently affect the token or community in order to accelerate the growth that will likely happen organically anyway.
Based on the feedback in this discussion thread, the team went back to refine the proposal so as to NOT make any changes to the ALPACA tokenomics. Options 1-3 from this post will no longer be considered.
We propose new alternative options for incentives for the upcoming products (Perp, AF2.0) in a new thread here: [For Discussion] Incentives for New Upcoming Products (Perp, AF2.0)
Please provide feedback and continue discussion in the new thread. Thank you.
the same opinion to you
This thread is closed. Please see huacayachief’s message above.