Private AV for Alpie owners using ALPACA-BUSD

Community Discussion & Proposal Product & Feature
1

Summary: Create an Automated Vault on the ALPACA-BUSD pool granting access only to Alpie NFT owners. This will be called Alpies AV in the proposal.

Abstract: At the moment of writing, the ALPACA-BUSD LP on pancakeswap offers 11% APR with 5.2M TVL.
An AV on top of that pool would need to have a very limited maximum capacity, otherwise the rewards would get diluted too much, making the AV unappealing.
Using alpie NFTs as a hard requirement to access the AV would deny whales a quick fill up of the AV while also increasing alpies utility.
Thanks to the new repurchasing feature we can also avoid possible problems due to the high volatility of the token.

Overview:
For what I understood the max size of a 8x AV with 5M built on top of it would be 1M TVL (125K of position value).
By a rough estimate I made, this AV should generate something around 40% APR

I’m proposing two possible implementations for the Alpies AV:

Option1 - Alpies staking revenue
We create a closed access AV and the alpaca finance team funds the initial 125K needed to max out the 1M TVL, that would generate something like 50k$ in a year with (40% apr - repurchasing costs).
Of course if the apr rises in a bull market the staking apr would become much greater.

Here are some staking scenarios:

  • 100 total alpies staked: 500$ a year per alpie
  • 500 total alpies staked: 100$ a year per alpie
  • 1000 total alpies staked: 50$ a year per alpie
  • 2000 total alpies staked: 25$ a year per alpie
  • 5000 total alpies staked: 10$ a year per alpie

Considering that the floor price of alpies right now is around 220$ on bsc and 100$ on eth it doesn’t look too bad.

The funds could be gathered from the warchest or from the devs wallet and will stay property of the team that will also be able to remove or add collateral to the position to adapt to the pool variations.
Then we distribute the Alpies AV interests to all Alpies stakers.
This feature would allow the dynamic staking/unstaking of alpies because you can’t game the system as you earn rewards only while your alpies are staked.
The negative of this option is that it requires the initial funding from the team.

Option 2 - Private ALPACA Saving Vault
We create an AV with access granted only to Alpies stakers.
To avoid the gaming of the system, we would need to add locked alpies staking as we do with Alpaca and AUSD3EPS on other 8x AVs.
We define the maximum amount of slot allocations that will grant access to the AV (eg. 1000).
Each Alpie staked for 1 year grants 1 slot allocation.
Each slot grants a certain amount of $ that can be invested into the AV (eg. 50$ in ALPACA per Alpie).
The maximum number of slots and the amount of $ allocation each slot grants can be adjusted.
The negative of this option is that alpies would need to be locked, disincentivizing their trading and reducing alpaca finance trading revenues.
Trading revenues are not high at the moment but they could increase greatly with the approach of the game release date.

Motivation:

  • Increase Alpies intrinsic value by adding more utility and reducing the marketplace offering
  • Increase liquidity in the ALPACA-BUSD pool
  • Slightly increase lending rate for ALPACA and BUSD
  • (option 2 only) Offer an alternative to governance and alpaca lending for farming more Alpaca

References: This is an updated version of the old proposal I made some time ago:

If you check the old proposal you can see how numbers were quite different at the time, that should give a general idea on how numbers could improve greatly during a bull market.

7 Likes
2

Appreciate your effort creating this post! I like both option 1 and option 2, noting that the aim is to provide greater utility for Alpies.

For discussion, I would add that with option 2, maybe there doesn’t need to be the time lock requirement. Instead, maybe a simple Alpie lock/stake feature when investing in the AV. My reasoning is that we currently don’t know how this game will play out. ie we might need access to our Alpies for game play, or registration of an airdrop etc.

There are a few unknowns that need to be answered. The main question being… how will Alpies benefit in the game release and what is their purpose? Once we have this info, additional features can be built around.

I believe that the Alpie’s features do need to be developed/improved and the above proposal could be one of these features. We are an optimistic bunch of Alpie holders, hoping for the best.

Thanks again.

1 Like
3

Unfortunately I don’t think there is a way to allow option2 without locking your alpies, otherwise you would just stake, put your allocation in the AV, unstake the alpies and sell them.

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4

Would need a feature that doesn’t allow you to deposit your allocation until you have staked your Alpie, and doesn’t let you unstake your Alpie until you have withdrawn your allocation.

My idea was that staking of your Alpie would be for the period of time your allocation remains invested, rather than a preset length of time, ie 6 or 12 months.

5

So what you mean is that you would have to remove allocations from the AV to be able to unstake your Alpies?
I’m not sure the current staking contract allow a check like that on withdrawal tho, we would need to ask @huacayachief.

6

Ah ok. I have no idea about coding or the contract. Just throwing ideas out there :sweat_smile:

7

This doesn’t quite work as users can easily transfer the AV token to another wallet address then unstake their Alpies.

2 Likes
8

Good post mate. Like it.

I’d lean towards the option that is either easier to implement complexity/effort wise or that is a good foundation for future needs.

Thanks for taking the time, in between baking pizzas, to come up with and suggest this idea

2 Likes
9

It seems that the pancakeswap reduction in emissions of the ALPACA-BUSD pool made this proposal unprofitable until something changes.
If the APR of the pool will rise in the future, the strategy could become viable again.
In the meanwhile we can only wait.

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