Team statement: Proposal 20 and xCVP initiative

No doubts, limiting CVP inflation and enhancing its value are attractive ideas!

Hello, our fellow CVP community! We were silent for a while, finalizing the long-awaited tech — Dynamic AMM, and PowerPool strategy for upcoming products.

All the news shortly:

• DAMM for ASSY is coming in 3 days. When it is activated, the token weights will be automatically adjusted based on M.Caps (within the week to make this process smooth). Once DAMM goes live AAVE staking will be activated as well. SUSHI will be after AAVE.
• YLA — Lazy APE index for Yearn is coming next week.
• Soon you will be able to launch your Unlimited ETFs with favorite tokens

Today we want to discuss two important topics: the recently published Proposal 20 and the xCVP initiative.

Proposal 20: Re-define rewards for PIPT, YETI, and CVP-ETH

The current CVP Liquidity mining program is a bit outdated and limits project performance. With ASSY the new approach for LM (CVP boost) was tested, and we see that it is efficient. So, our opinion on proposal 20:

1. First of all, we completely agree that CVP inflation is too big, and the community should limit it. We think that for sustainable growth CVP community should decrease rewards gradually (step-by-step) in ~3 times and focus rewards on products/activities that provide value
2. We agree that YETI-ETH Balancer pair is completely inefficient, liquidity should be moved to Sushiswap and rewarded in Sushi
3. We agree that PIPT-ETH Balancer should migrate to Sushiswap, and it will enable swaps between indexes (ASSY PIPT YETI)
4. We agree that near to 100% APY just for holding an index is crazy, so we support lowering rewards for PIPT and YETI staking rewards. We suggest decreasing them one more time next month.
5. The idea to keep CVP-ETH rewards is ok. But we advise to decrease them when CVP will gain more value against ETH and IL (impermanent loss at CVP-ETH pair) will decrease
6. We think that finally, we need no more than 400–500k CVP per month releasing as a result of LM programs

Proposal: future fee distribution and the creation of xCVP

Let’s start with facts. The proposal [topic was started 11 days ago] states that $200k is already collected at CVP treasury contract.

CVP treasury is $300k now: +$100k by 11 days

The “treasury” question is spreading up in the community. How and when these rewards will be distributed to CVP holders? It is an open question, and xCVP proposal offers a great solution for that.

So, what is xCVP in a nutshell? Basically, it is a contract that
(1) allows to stake CVP and provide LP token for the user, who staked CVP (xCVP = “LP token” of this pool)
(2) uses collected fees for buying CVP on the market and adding these CVP tokens to all tokens on the contract. It means that xCVP constantly grows in terms of CVP, and the APY for this pool is based on total collected fees and CVP price.

Other ideas that were discussed in the community:

1. xCVP can be used to participate in governance (on basis of CVP stake)
2. The CVP Boost program for indexes can be based on the xCVP contract (users, boosting rewards will provide CVP to xCVP). It will provide an additional APY for users of PowerIndexes
3. xCVP can be used as a collateral in various Defi protocols, while CVP collects interest in the xCVP contract
4. Add a lock-up period for CVP (similarly to CRV, but not so long)

So, xCVP can provide a lot of value to CVP token holders. We see this proposal as reasonable and timely. Push it forward in let’s see how the community will vote!