Good questions @JeremyDelphi, glad you like the proposal , I agree this is time sensitive and we should aim to complete the on-chain vote so we can make our moves before the next gauge vote ends on December 13th.
I think it’s quite simple, while the arbitrage opportunity exists where emissions from Votium incentives > $1 it makes sense to enact this flywheel system. As @YanDelphi mentioned as long as the $250m from Proposal 2 > 1/($emissions per $votium incentive) we would acquire more CVX/CRV than outright buying. As a toy example, if we held 1/2 of the total liquidity in the Curve pool then by incentivizing via Votium with $1m we would obtain 2.325m in CVX/CRV vs with an outright buy we would obtain $1m in CRV.
I completely agree with your sentiment here, vlCVX controls much more of the veCRV. Additionally since we are approaching the 80% mark of all CVX emissions cvxCRV emissions will likely be less beneficial than directly trading the CRV to CVX and vote locking additional CVX.
Jeff answered this question in a comment after yours:
Correct me if I’m wrong, but wouldn’t dropping 250m of liquidity into the UST-3crv pool hurt those already providing liquidity to that pool and getting convex staking rewards? Seems like you would want to reward existing liquidity providers, not compete with them.
very positive on proposal 1 & 2.
Not sure the seat is important at this time. We still can compete next round vote. And the return probably may not so great. Keep neutral view on proposal 3.
We really need to continue doing this with x% of community funds so they don’t sit idle. Compounding returns on top of Luna growth is optimal to then only use the yield for community projects.
Other more degen meets tradfi include DOV on Luna for these three strategies above and using the yield from that to deploy these yield-bearing strategies. I.e. You should be selling calls against the Luna the community is selling/swapping because every time it doesn’t the community pool loses call theta yield.
Every time it needs to be swapped back or know it will swap back to Luna, high delta .5 delta puts should be sold at a DTE that is the swap backdate because again, the community pool is already short if it needs to buy it back, and is losing 30-60% yield not selling puts on something it’s short i.e. selling puts covers the position with yield.
Overall this is a very basic strategy with no risk. The risk is losing huge yield from theta decay on both the call and put side that would probably be 2-3x greater than the defi farm yields.
Update: Jan 6, 2022
Third gauge vote we’re participating in begins today!
Dec 23rd UST-3CRV pool size: 392,566,360.43
Today’s UST-3CRV pool size: 433,352,668.37 this is a 10.4% growth in the pool
The Terra Community Pool owns 58% of the pool
Jan 6th UST-3CRV pool size: 433,352,668.37
Today’s UST-3CRV pool size: 608,106,543.81 this is a 40.3% growth in the pool
The Terra Community Pool owns 41% of the pool
Luna incentives claimed back through Votium to be recycled: 5,737.82
Cumulative vlCVX: 106.9k ~= $4.2m, with roughly $524.6k additional CVX unclaimed
New votium incentives will be deposited shortly totaling $4m worth of LUNA + 5,737.82 recycled LUNAs
Jan 19th UST-3CRV pool size: 608,106,543.81
Today’s UST-3CRV pool size: 628,805,894.91 this is only a 3.4% growth in the pool - this is likely due to the extreme market events that occured these past two weeks. We saw the pool drop to ~500m and rise back to ~630m all while UST held it’s peg.
The Terra Community Pool owns 39.7% of the pool
Luna incentives claimed back through Votium to be recycled: 5,328
Cumulative vlCVX: 155.4k, with roughly $635.8k additional CVX unclaimed
New votium incentives will be deposited shortly totaling $4m worth of LUNA + 5,328 recycled LUNAs
Feb 2nd UST-3CRV pool size: 628,805,894.91
Today’s UST-3CRV pool size: 1,269,017,464.56 this is a whopping 101.8% growth in the pool
The Terra Community Pool owns 19.7% of the pool
Luna incentives claimed back through Votium to be recycled: 6,418.2
Cumulative vlCVX: 225.4k, with roughly $604.3k additional CVX unclaimed
Votium incentives deposited totaling $4m worth of LUNA + 6,418.2 recycled LUNAs
Update March 5, 2022
Seventh gauge vote has begun!
Feb 19 UST-3CRV pool size: 1,269,017,464.56
Today’s UST-3CRV pool size: 1,317,560,454.77 this is a 3.82% growth in the pool
The Terra Community Pool owns 18.9% of the pool
Luna incentives claimed back through Votium to be recycled: 7065.2065
Cumulative vlCVX: 284.9k, with roughly $359k additional CVX unclaimed
Votium incentives deposited totaling $4m worth of Luna + 7065.2065 recycled LUNAs
, I agree this is time sensitive and we should aim to complete the on-chain vote so we can make our moves before the next gauge vote ends on December 13th.