Announcing the Launch of the ALPACA Governance Vault! Higher APYs for ALPACA holders!
We senior alpacas are thrilled to announce yet another major product release to wrap up 2021 on a strong note. Starting the 21st of December 2021, you’ll be able to lock up your ALPACA in the governance vault for higher rewards and platform revenue sharing!
❓How the Governance Pool Will Work
Our governance vault is a fork of Curve DAO’s governance. We believe this is one of the best models to align the incentives of the platform with loyal token holders.
You’ll be able to choose how long you want to lock up your ALPACA tokens, from a minimum of 1 week to a maximum of 1 year. In return, you will receive xALPACA tokens which will represent your share in the governance rewards pool as well as your voting power for the upcoming governance functions in Q1 2022.
The amount of xALPACA you’ll receive will be calculated based on the amount of ALPACA deposited and the remaining lock duration, where 1 ALPACA locked for one year = 1 xALPACA. Your xALPACA balance will decrease linearly over time and will reach 0 when it’s unlocked.
The longer you lock up for, the more xALPACA you will receive, which translates into a higher multiple on your rewards APY and governance voting power.
Example 1:
- Alice locked 100 ALPACA for 52 weeks and received 100 xALPACA
- 26 weeks have passed. Alice’s xALPACA balance became 50
Example 2:
- John locked 100 ALPACA for 26 weeks, and received 50 xALPACA
- Feeling like a llama, John then decided he’d prefer to get a higher multiple on his rewards so he extended his lockup from 26 to 52 weeks, and received an additional 50 xALPACA, bringing his total balance to 100 xALPACA
💡 Pro tips
- To ensure you always get the maximum APY on your governance rewards, you can extend your lockup period (to the max. 52 weeks) every week before the snapshot is taken
- You can add ALPACA to your locked position or extend the locked duration at any time
- You can only have one locked position for each wallet address. If you wish to have multiple locked positions with different durations, you can use multiple wallets
- Unlock also happens weekly at the same time as rewards distribution, at approx. 00:01 every Thursday
🎁Rewards for Participants
By locking up your ALPACA, you will be entitled to receive ALL the following rewards!
ALPACA Emissions
A️ portion of ALPACA emissions will be distributed to governance vault stakers — 300 allocation points (~0.355 ALPACA / block.) These rewards will be shifted from the ibALPACA staking pool.
Grazing Range Pool Rewards
Governance vault stakers will earn token rewards from all future Grazing Range pools. Moreover, you will not have to choose which pool to stake in. If there are multiple pools running concurrently, you will be eligible to receive rewards from all of them! The yields will stack up for you.
There will not be a change to the existing GR pools. ibALPACA will continue to be used for staking in the old Grazing Range page until the reward periods on the current pools end
Platform Revenue Sharing
To align closer to market rates, and give more benefits to ALPACA holders, we will adjust the leveraged yield farming performance fee to 9% (on yield farming rewards portion only). Of this, 5% will go to Protocol APR for the ALPACA stakers in the governance vault (as an ALPACA buyback), with the remainder going towards the development fund.
This is a new revenue stream for ALPACA stakers that will bring in an additional ~2.6Mn/year or ~$50k/week (based on last week’s metrics) as rewards to them, adding a consistent income channel on top of the existing Protocol APR, Grazing Range rewards, and long-term deflationary benefits through buyback & burn that ALPACA holders enjoy. That’s right, dear alpacas, you’re about to get fat on grass.
Governance Voting Power
More xALPACA = more votes for governance proposals. This is coming in the second half of the product release for this governance vault next quarter.
⏰Rewards Distribution Mechanism
Due to the smart contract structure, rewards will now be distributed on a weekly basis.
Each week, we will take a snapshot of users’ xALPACA balances at 23:59 UTC Wednesday. This balance will be used to calculate each user’s share of the rewards accrued in the following week. Rewards will then be available to claim the following Thursday.
Let’s look at an example to further clarify this concept.
- Users will be able to start locking their ALPACA when we deploy the UI for the governance vault on Tuesday, the 21st of December.
- The first snapshot will be taken at 23:59 UTC on Wednesday the 22nd of December.
- All the users that lock their ALPACA in the governance vault before 23:59 UTC on the 22nd of December will be eligible for the rewards that accrue from 23rd December to 30th December.
- Rewards will be available to claim after 00:01 UTC on Thursday, the 30th of December.
💡 Pro tip
Make sure you make any adjustments to your locked positions(such as extending lockup for a higher multiplier or adding more ALPACA) by 11.59PM UTC Wednesday to get the max allocation from the following week’s rewards.
With this new lockup vault, selling pressure on ALPACA should decrease substantially. When combined with the token’s deflationary nature, that should tip the ALPACA trading market towards net buying and price improvement, as has been the case in other protocols that have introduced lockup vaults.
Now, as 2021 draws to a close, we would like to take this opportunity to thank our community and partners for their continued support. The team is grateful for all your help, suggestions, participation, and kind words. It’s been a busy year but we will continue to work tirelessly to deliver on our roadmap and make the best products we can. Happy Holidays!
