Welcome to the JellyDAO

Published in

Jelly

5 min readSep 8, 2022

The JellyDAO is a core part of Jelly becoming a decentralised rewards protocol. With 55% of the total supply of JELLY allocated to govern the rewards distribution of JELLY, the implementation of the JellyDAO opens a whole new world of utility for the JELLY token.

In the words of Willy Wonka “There is no life I know to compare with pure imagination.” Until now, we at the Jelly Factory have been the music makers, we have been the dreamers of dreams. But now we welcome you to join us and enter the JellyDAO.

veJellynomics and the Jelly DAO

When you join the JellyDAO, you can create proposals and vote on the allocation of JELLY rewards. To be part of the JellyDAO governance, you need veJELLY (vested escrow) to gain voting power.

This diagram shows the veJellynomics as at today, with the inflows/outflows and the function of the JELLY/veJELLY token.

As at September 2022, the implementation of veJELLY and the Jelly DAO now govern the Rewards Multisig allocation and distribution

If you know a thing or two about tokenomics, implementing utility is a critical step in creating a valuable token. We need a tokenomics model that is congruent with the goals of the protocol and the community who governs it.

Governance over the allocation of Rewards

Take Curve as an example, CRV is the native token whose main utility is governance. People lock CRV to get veCRV and can vote on the allocation of CRV rewards. The demand for the token is driven by the demand from liquidity providers to direct rewards to their favourite pools, this is the buying point. We have seen how powerful this form of decision is for the demand of a token, with the Curve wars seeing bribes from protocols wanting to gain more voting power to direct rewards to their pools. This form of governance is creating a new form of value, and has spawned new projects like Convex Finance and more recently Aura that focus on the value of the metagovernance layer.

This is why the first utility of the JellyDAO is directing rewards, aligning the incentives for directing rewards with the value of the token. Directing rewards also gives the Jelly community real experience in understanding the relationship between the cause and effect of incentives on the JELLY token ecosystem, increasing the protocol’s collective intelligence.

Up until today’s launch of veJELLY, JELLY holders either had to hold or sell their token. Now, things are starting to get a little more interesting as we open up the decision making to the rewards community.

JellyDAO Maths

Let’s crunch some numbers and check out some charts to figure out the what the Jelly DAO is governing for Q4 2022

With 55% of the Token supply going to rewards, that’s:

550M JELLY total available as Rewards
On a 4year schedule, that’s 135M per annum, with 35M JELLY available every quarter for the JellyDAO to distribute as incentives for growing the protocol

In terms of the numbers so far:

There are 85M JELLY in the Rewards multisig for the remainder of the year
Less than 10% of the total 550M rewards have been spent overall
Only 65% of the rewards have been allocated for Year 1, so we are running at a surplus of unallocated rewards.

After factoring in existing commitments and outstanding balances, for Q4 2022 there are a remaining 55M Rewards available to distribute based on proposals.

Rewards Multisig address: 0xc5D6dEA9e0fcF53B6104f5A77a3790fc79621C7C

Zooming out to see the big picture

We’re now in an era of defi where a good idea and a token are no longer enough. We need to create a big enough moat between our competitors, and create differentiation beyond dex forks to create yield that lasts the long term. Rewards is a growing market, the trend in token distribution for projects sees rewards are becoming a bigger part of the tokenomics pie:

Jelly has been building tools that make it quicker and easier for projects to implement their rewards distribution. If we get it right with the introduction of incentives and (3,3) incentives for projects, we have a chance to become a category leader for a new type of protocol centred around the distribution of rewards.

The ultimate goal of the JellyDAO

The JellyDAO has the ultimate goal to use the JELLY Rewards pool to drive future growth and yield for all veJELLY holders. This diagram outlines the second part of the tokenomics and utility: where fees and recipes work together with the JellyDAO to build yield.

The future tokenomics model, when projects are onboarded to Jelly Recipes.

All the Recipes we’re building come with inbuilt fees in the project’s token. This incentivises the Jelly community to create more value in the project’s token and as we onboard new projects and create new recipes, we start to grow the fee pool in the Treasury. Once fee TVL reaches a significant amount, we’ll start to look at distributing a proportion of the protocol fees from the Treasury to veJELLY holders.

The objective for the JellyDAO is to develop proposals that will incentivise more projects, to direct rewards towards opportunities that amplify the Jelly ecosystem.

Joining the JellyDAO

To join us in the JellyDAO, here’s how you get your veJELLY voting power and start discussions:

Sticky Pool

Visit the Sticky Pool to build your veJELLY voting power: https://app.jelly.io/

When you lock your JELLY, your staked JELLY is represented as a veNFT with a veJELLY Balance. The onchain SVG Artwork for the veNFTs is dynamically determined by the veJELLY power and you can find the Opensea Collection here: https://opensea.io/collection/sticky-pool

ve bonus on rewards claims

To give our existing community a bit of a power up, we’ve implemented a ve bonus for this month on the First Course Airdrop and Farm pools. You’ll get 20% extra JELLY added to your claimable rewards if you VE STAKE them instead using the new button on the UI.