From the discussion it’s clear that the community does not think that the current proposal goes far enough to reward the community. These concerns must be taken into account.
Below is a totally overhauled proposal which we believe fully addresses the concerns raised, while providing the conditions for the long term growth and viability of the protocol.
As requested by the community, firstly we propose introducing a rewarded time-locking mechanism. Users will be faced with a choice:
Option 1: Lock GYFI for 24 months and receive twice as much as the base allocation. Tokens would be subject to a release/vesting schedule, where they start to become liquid after month 9 and unlock until month 24.
Option 2: Claim all GYFI upfront, but incurring a 50% penalty compared with Option 1. Tokens would be subject to a release/vesting schedule, unlocking over a 9 month period.
Secondly, addressing the community concerns that the total GYFI allocation to SPIN holders does not meet 10%, significantly improve the SPIN to GYFI rate for users:
For Option 1, make the rate much better than the initial proposal, at 400 SPIN/GYFI (rather than the original 1065). So, everyone who chooses Option 1 would now receive 2.5 GYFI rather than 0.94 GYFI for every 1000 SPIN. (Remember, the lower the SPIN/GYFI rate the better for users as this means more GYFI per SPIN).
For Option 2 - where a user opts for a 50% overall cut to have access to instant liquidity - the SPIN to GYFI rate would again be improved compared with the initial proposal, to 800 SPIN/GYFI (rather than the original 1065). So that means for every 1000 SPIN a user would now get 1.25 GYFI rather than 0.94 GYFI.
Subject to a separate detailed DAO proposal and vote, make a total of up to 130,000 additional GYFI available to reward Gyroscope protocol OGs, independently of the SPIN discussion.
Altogether, these changes mean that if, at the time of any future airdrop, 500m SPIN has been distributed and users choose Option 1, a little over 10% of the GYFI supply would be distributed to the community.
APRs for each option at different FDVs
(implied APR at 10x SPIN rate)
Hey guys. Nice to see this being discussed here in detail, and thank you for taking into account community feedback. Given the discussion so far, heres how Im thinking about it.
CORE OBJECTIVES: I think we all can agree on this. We want to:
Maximize protocol sustainability
Reward risk-taking fairly
Create long-term alignment
Prevent asymmetric value extraction
Enable effective governance
RISK-ADJUSTED VALUE CONTRIBUTION: Previous proposal could’ve better priced:
Time value of capital
Opportunity cost during SPIN accumulation
Market risk exposure
Protocol risk exposure
Network effect contributions
ALTERNATE PROPOSAL (these are just a collection of ideas. We can take what works and there is consensus for):
DYNAMIC CONVERSION RATE: Instead of fixed tiers, what if we make it dynamic? something like this?
Thank you, FTL Labs, for moving the discussion to The forum instead of private channels, where everyone can have a voice in shaping the future of the DAO.
First, I’d like to point out that calling the SPIN program a “success” is debatable, especially when we compare its metrics to those of recent competitors like Ethena, Elixir, and Usual. After seven months, we’ve reached nearly $3M in TVL worth of $GYD—a result that may not meet everyone’s expectations. Additionally, it may not be fair to compare the yields of an established, battle-tested DeFi product like Curve or Convex with those of a newly launched stablecoin like Gyroscope, where there are higher associated risks and rewards are locked.
In my view, here are some issues that have made the program less appealing to the general market:
Unclear timeline and duration of the incentive program
Low APR, especially compared to other market opportunities
Poor UX for retail users, who struggle to find the best strategy (e.g., whether to earn bribes and yields or earn SPINs)
Uncertainty around incentives for OGs, Gyroscope founding members, or NFT holders, as highlighted by @Mrfti
Lack of transparency about Gyroscope’s valuation and total funding raised to assess FDV at TGE
Unknown timing of TGE and locked rewards
No integration with leveraging tools like Pendle to increase TVL metrics
Late-stage launch of Web3 campaigns on Galxe during the SPIN program
In my opinion, regardless of how much $GYFI we allocate to the current LPs, without a successful incentive program, we will struggle to achieve a strong valuation. As @PanCake highlighted, a $30M valuation seems optimistic given the current state and may fall short of the expectations of early users and OGs who have supported Gyroscope since 2021.
My Suggestions:
Design a new incentive program by the DAO and FTL Labs, inspired by other successful programs, that addresses the issues listed above. This program should include a clear TGE timeline and unlocked rewards to boost TVL and battle-test Gyroscope’s designs and mechanisms. Most importantly, it should aim to grow the community.
To prevent dilution by new users in the incentive program, we should reach a consensus on this proposal and reward early $GYD adopters. I will share my thoughts on this proposal in another comment.
Simultaneously, propose rewards for NFT holders and OGs as outlined by FTL Labs, to ensure they’re adequately acknowledged and incentivized.
I’m glad that team is addressing the feedback from the community, and I believe this is going in the RIGHT direction, but some parts of the proposal are still not quite there yet.
Two most important aspects of this proposal should be that it’s FAIR and MEANINGFUL.
To address each part of the proposal:
I believe that 2 different LOCKUPs and VESTINGs are fair, but their specifics like duration might not be in this case. In comparison to other protocols with POINTS systems, these lockups are substantially higher, but the allocation isn’t. We need more information here, there is 35% of the GYFI supply for the team and some part of it is for investors, what unlock schedule is there? What about vesting? What will be initial circulating supply? It should be at least 15%+, to avoid low float compared to FDV. If it’s not, I don’t see a reason for lockups.
I could agree with these lockup durations IF investors and other parties, would have HIGHER lockups, to ensure fairness, especially as we are distributing around 10% here, and other allocation is 35%.
To address the second point, I believe that distributing over 10% here is MEANINGFUL. Also FIXED RATE is FAIR as everyone will be rewarded at the same rate for their capital, which is extremely important .So, I would vote YES for this part. BUT there is still an issue. Team is still proposing different distributions based on SPIN distributed, which I don’t like, and I would vote NO here. This creates uncertainty, we DON’T know how much will actually be distributed until it happens. If we distribute at 500m SPIN, we are looking at another 6+ MONTHS of campaign, which is a dealbreaker for a lot of people based on the feedback. Also, and most importantly, campaign could END WAY SOONER, if TVL of 100m is reached, that would mean that significantly LESS would be allocated for SPINs. Or there could even be another proposal to end the campaign early, with less SPIN distributed. I still believe that 10% should be pro rata distributed to SPIN holders, regardless of how much (but 500m MAX) is reached. That way it’s clear how much will be distributed, and there is still a deadline.
I agree that there has to be allocation for OGs, I would discuss specifics for this in a separate proposal for that.
Thanks, I look forward to discussing this further.
I am totally against vesting token for community. Because the community has been waiting for 4 years and it is not fair for them to wait for months to receive a reward. Vesting should only be for the team and investors. As we see in other projects.
Also, how much airdrop are you going to give to the community? It is not more than 10%, right?
If 10% airdrop is given, it will be about 1,370,000 tokens. This is not a large number of tokens, so they should all be free in tge time
Also, GFF owners have been with the project for years and this bonus of 130,000 tokens is a joke.
Considering these things, this is my suggestion:
If it is going to be 10% airdrop>>
7% spin holders
3% GFF holders
so
13700000 x 0.07 = 959000 GYFI for spin holders
rate; ~521 spin/GYFI
13700000 x 0.03 = 411000 GYFI for ogs
all token unlocked at TGE + some another share like liqudity and exchane
Great to see the discussion being steered in the right directions. Just wanted to be transparent here that I am a LP and have been farming SPIN since the start of the program. I am not sure if I am considered an OG, but I have interacted with the protocol since Dec 2023.
On point 1, I certainly think the current proposed vesting schedule is too long. The SPIN program started since March this year and we are just roughly halfway to 500M SPIN. Assuming the emission rate is constant, this means we still have another 8 months to hit 500M SPIN. By then, the program would have dragged on for well over a year and do we really still expect the community to have their airdrop locked up?
Furthermore, since we are trying to match the yields of other similar protocols in the market (which have yields/rewards that are liquid from the start), wouldn’t it be fair to have the rewards fully unlocked at TGE?
If there is a strong reason to lock the tokens, I think the vesting mechanism suggested by @emzod is much more palatable. I also share the same view as @PanCake that there should be better transparency on the vesting schedule for early investors. Ideally, the community vesting should be shorter than early investors.
Finally, I think we can perhaps frame the vesting mechanism in a positive manner such that we are rewarding lockers instead of punishing those who doesn’t want to lock .
On point 2, I once again agree with @PanCake that there should be a fixed amount of $GYFI allocated for SPIN holders instead of coming up with a conversion rate. I think it is useful to have clarity on how much $GYFI will be allocated to the SPIN program so that the DAO can better plan for future community incentives.
On point 3, I have no strong views on the amount to be allocated to OGs. However, the current proposed amount do seem tad too low .
To sum it up, my proposal is as such:
8% of initial total $GYFI supply to be allocated to SPIN program.
2% of initial total $GYFI supply to be allocated to OGs (definitions and other specifics to be discussed in a separate proposal).
Vesting mechanism: No lockup by default but users can choose to lock for an arbitrary period (max 24 months) for up to 50% boost to their airdrop. Locked $GYFI to be vested linearly.
The boost should not dilute the 8% allocation to the SPIN program and the extra $GYFI would be coming from the remaining amount reserved for community incentives.
In the unlikely scenario that every user chose to lock for 24 months, it will just be an additional 4% of the total supply of $GFYI for a 2 years program.
Also thought I’d make my personal thoughts purely from intuition clear. Todays election results made it more clear for me. (the earlier response was from the perspective of fitting into the implicit requirement set from the initial proposal:
I think the focus should be less around returns (on an APR basis) because this creates complexity around how you value Gyro today, and we instead should focus on rewarding LPs and active users who stuck around, handsomely. I’d say give a meaningful % of the float, multiples more than proposed. More skin in the game to loyal LPs and users means more they are more likely to stick around (especially when they consider the impending positive regulatory overall and better market structure as a consequence). I hate to use this phrase, but i think it up best: increasing community networth (when you have a solid product which i strongly believe gyro does), is simply the best way of doing it at this moment (emphasis on the regulatory shift and easing macro liqudity conditions).
IF on the other hand, even if there is heavy sell pressure (which i think is now less likely given the positive future DeFi has), this will end up creating a wider distribution base which is also much better longer term, as the cost basis for participants is lower. At least in this scenario, the market is valuing GYFI, not coming from top down planning (more likely to create unhappy participants and resentment). I think now is the best time to do such a thing, and easiest to get mindshare as a solid stablecoin. I think this game becomes far harder as more players enter into a market with better liquidity conditions.
With regards to vesting: I’m not sure what the value proposition at this moment is, because most people have already committed capital for a meaningful period of time. I think any morale loss here has a higher -EV than any +EV gained from the reduced sell pressure and in terms of community growth and attracting future LPs. We ideally should set strong precedence for rewarding LPs. Most protocols/projects that have rationed their token distribution (using strict APRs etc) after extended periods of time are worse off today than they would’ve been if they just let the floodgates open. eg: Scroll, Namada, Blast.
Thank you again for opening up the discussion to a wider audience here. Super excited for the future for GYD and GYFI.
To the proposed % distributed, I don’t believe we have to restrict this proposal to MAX 10% total, it could definitely be higher, 10% for me was just minimum, which would be meaningful.
I also don’t believe that it should be 10% TOTAL. OGs allocation should come on top of that, so another 2-3%, so 13% in total for example.
I want to emphasize again, that we have allocated 65% of total supply for community, which is significantly higher than most other protocols.
I believe that we should consider user token locks once we understand the lock duration for early investors. Additionally, I think locking should be optional rather than mandatory, serving as a bonus for those who choose it.
For this to be effective, we need to create real incentives—users should have a reason to opt in. To that end, I suggest considering ongoing Spin rewards for lockers (assuming we have a Season 2 Spin) or other enticing benefits.
As @Mehdi pointed out, the timeline and duration of the incentive program remain unclear; it would be beneficial to have an overview of upcoming events, such as whether there will be airdrop szn2? Important to emphasize that, regardless of the $GYFI allocation, building strong valuation will be difficult without an effective incentive program.
Regarding the OG share, I’m unclear on how OGs are defined and how many there are, but the current allocation of 130k seems quite low—especially if the OG criteria were like voting power distribution!
Thanks for reconsidering the options. But this lockups are too harsh. I have not seen such lockups in other projects. Also considering Gyroscope started in 2021, it is been 4 years. SPIN program has been running for more than 7 months. Considering all this:
NO mandatory lockup for majority. Only for large whales maybe.
Optional lockup with reward incentives.
Minimum 7% to SPIN holders. Fixed, does not matter on total SPIN supply.
3% to OGs. They got large governance powers but having few tokens does not make sense. They are here since 2021.
The initial circulating supply min 15%
Also, the main goal here should be to reward early supporter and active protocol users.
Completely agree with Mrfti. A holistic governance system that empowers all stakeholders, from token holders to NFT holders, is crucial for GYFI’s success.
I propose:
Including a clear outline of each group’s role and contribution to the governance process within this proposal.
Providing a specific timeline for determining rights and responsibilities for other stakeholders, such as NFT holders.
This approach will create transparency and trust for the entire GYFI community.
Few important comments.
-Lock and penalty terms were not proposed by the community but solely by me. Single person ideas do not equal community approval;
-24m is absurd. for someone to chose 24m lock you should propose at least 700-1000% in fully guaranteed rewards; because price will go down -80-90% by the time they get their unlock. Also it overlaps with VC and team vesting schedules. So, considering SPIN campaign is only half-way through I’d reduce MAX VESTING to 3-6m or NO VESTING at all instead of initially proposed 12;
-forget about rigid terms. user should be able to unlock whenever they want with TIME-DECAY PENALTY. this practice gives flexibility but also excludes concentrated selling in a short timeframe;
-penalties should not go to the “community treasury” but should be distributed among those who would decide to continue their vesting. those penalties should come as a bonus to the high APR provided initially for those who vest/stake (or staking/vesting should provide powerful boost for the second campaign);
-you have not addressed future SPIN/GYFI incentivisation. it is crucial for the current LPs/users to evaluate the possibility of their future contribution, how it is tied to the initial distribution and how well future users will be incentivized.
I HEAVILY OPPOSE to rigid and long or even medium term locks.
I SUPPORT insanely generous rewards for the current and future LPs because there is no benefit in holding GYFI in the treasury for the future that could never come (i.e. your project could be forgotten and not used). You need to act aggressively now to compete and win.
I believe this counterproposal strikes the best balance between fair rewards for early contributors and upside for those who lock/stake for the long run.
Here is a final proposal for any remaining community feedback. The intention is to move this to a Snapshot vote next week.
TL;DR
We propose to set the SPIN-to-GYFI conversion rate at 1066 SPIN per GYFI. We propose that SPIN holders can boost their conversion rate by up to 150% by choosing to lock up their tokens.
Currently, around 300m SPIN are allocated. At the above proposed conversion rates, this corresponds to 2.05% – 5.14% of GYFI total supply allocated to SPIN holders (where the range depends on the lockup option chosen by users).
We propose to increase the cap on SPIN from 500m to 700m. If all 700m SPIN are allocated and at the proposed conversion rates, this corresponds to 4.79% – 11.98% of GYFI total supply (again, where the range depends on the lockup option chosen by users).
Background/motivation
This contains two related topics:
What the base conversion rate from SPIN to GYFI (Gyroscope’s Governance token) should be
What the claiming options for GYFI should be
These decisions should be made by the Gyroscope Protocol’s governance community.
The initial total supply of GYFI is set at 13.7m tokens. Additional distribution properties of the token were ratified here.
Out-of-scope are other important topics such as an airdrop to Founding Member NFT holders, methods the DAO will use to bootstrap liquidity and other key topics. These will be covered in future proposals in the coming weeks before January.
First token distribution is anticipated to be in January 2025, but the precise date will be the subject of a future proposal.
Summary of proposal
A rewarded time-locking mechanism. At the moment of any future airdrop, every user will be faced with a choice:
Option 1: fully-liquid GYFI tokens. Any user will be able to convert their SPIN to GYFI at a rate of 1066 SPIN per GYFI. A table of APRs implied by different FDVs is provided below for reference. There will be no vesting of tokens up to a cap. The cap will be set high so that it only affects the very largest SPIN holders. This is standard in most projects. Option 2: lock up GYFI for 9 months and receive 40% more GYFI than Option 1. The locked tokens will start to unlock immediately over the course of 9 months linearly. Option 3: lock up GYFI for 18 months and get 150% more GYFI than Option 1. There will be a 9 month cliff, so that users receive no liquid tokens before month 9 and then tokens linearly unlock from month 10 onwards.
Users will be able to choose a combination of options 1-3: of their initial GYFI allocation, they can choose just one option or split their allocation across multiple options. For example, a user may choose to receive 20% of their GYFI immediately (without an additional boost) and 80% according to Option 3.
SPIN holders above a large threshold will be subject to an additional linear lock-up of 6 months on top of the three options presented above: these holders can choose, for the part of their token that lies above the threshold, the modified options 1 (6 months linear unlock), 2 (15 months linear unlock + 40% more GYFI), and 3 (9 months cliff + 15 months linear unlock + 150% more GYFI). This means that holdings above the threshold are always subject to a mandatory lockup, and holders can choose to lock their tokens up for a further amount of time to receive additional tokens. The threshold will be chosen such that only few, very large SPIN allocations are affected.
In addition, a ‘surge’ SPIN scheme will be set up, to run a campaign for 3 weeks targeting even higher APRs.
Define an extra 200m SPIN to be held in reserve above the 500m prior cap. This SPIN is to be used in the event the 500m SPIN cap is met as a measure to keep incentives fluid into and beyond the token launch until any replacement incentive programs should take over. With more clarity now on the token distribution timeline and many scaling factors now coming into play for GYD and E-CLPs, this is a prudent backup measure to ensure growth remains fluid. Note that, since this proposal fixes the SPIN/GYFI conversion rate, emission of more SPIN would not dilute existing SPIN holders in terms of GYFI received. Governance could later vote to further extend the SPIN program beyond the 200m SPIN boost if it deems it beneficial.
If this proposal passes on Snapshot, it is proposed that the team maintaining the frontend reflect the decision on the SPIN/GYFI conversion rate and make it easy for users to understand what it means for them.
What this means in APRs for different FDVs
Assuming no tier boost and SPIN earned via a 10x rate:
FDV at launch
Option 1 - fully liquid, no boost
Option 2 - 40% boost
Option 3 - 150% boost
$30m
18%
25%
45%
$50m
30%
42%
75%
$75m
45%
63%
112%
$100m
60%
84%
150%
$200m
120%
167%
300%
$500m
300%
420%
750%
Users who have earned SPIN tier boosts receive APRs that are significantly above the baseline with no tier boost. For example, assuming a tier boost of 1.5x (Tier 5) and SPIN earned via a 10x rate:
FDV at launch
Option 1 - fully liquid, no boost
Option 2 - 40% boost
Option 3 - 150% boost
$30m
27%
37%
67%
$50m
45%
63%
112%
$75m
67%
94%
168%
$100m
90%
125%
224%
$200m
180%
251%
449%
$500m
450%
630%
1125%
Feedback from Step 1
This proposal has evolved significantly following two distinct rounds of feedback from the Community, both here on the forum and feedback received via Discord.
The main community concerns were:
Both vested and unvested options were discussed, and many community members felt that there needs to be fully liquid option. The new proposal provides both liquid and vested options. Users who want to commit to a longer term position in the project can get very generous allocations while users who prefer immediate liquidity can choose rewards that remain above comparable rates on their TVL (based on the 10x SPIN rate or the combination of SPIN and BAL rewards that was prevalent before the 10x rate was introduced).
Uncertainty about the timeline for distributing GYFI to SPIN holders. Guidance is given in this proposal that the target of first token distribution is January 2025 with precise date the subject of a future proposal. Timelines will be able to be much clearer from here on out.
A lack of information about the team and investor unlocks. All of this information will now be collated and shared with the community in the next 2-3 weeks.
There was concern that SPIN holders were not being rewarded for the length of time they have provided liquidity. It should be remembered that since SPIN is earned on a $-hour basis, the length of time commitment is already directly rewarded in the SPIN total. The SPIN tier bonus rates also add an effect on top of this: users who use the system longer get tier boosts to their SPIN earnings. Gyroscope OGs, such as founding members, also receive a free tier boost.
There was concern about governance capture. It should be noted that the Gyroscope Governance system is specifically and fundamentally designed to avoid this issue in its multi-stakeholder design. See the docs here.
There was concern about what the GYFI distribution might be for other groups (like Founding Member). As said above, these matters will be addressed in a follow-up proposal. As a reminder, founding members receive a free SPIN tier boost, and so already receive large bonus potential within SPIN itself.
It was raised that there should be a plan in place for future SPIN/GYFI incentivization past the token launch. We have added a plan here for a reserve amount of new SPIN to fill any gaps in incentive programs and that could be phased out when other incentive programs take shape.
Amount distributed is too low.
To distribute at least 11.98% you guys are suggesting that the SPIN cap would increase by 40% (to 700m) and everyone would have to lock-up their allocation for 9 months cliff + 9 months linear, on top of already participating for 9+months, which is insane in my opinion.
Again, I don’t believe that implied APR means anything at this stage, the only meaningful measure is % of supply, which gets distributed. 10% should be base case for distribution with no lock-ups.
People have been earning SPINs for more than 9 months now, so I believe that even in this form, this proposal will be passed unfortunately, as people just want to finally get something back for their SPIN.
I will not be voting for this proposal, as I believe that people deserve better.
On your point of increase of SPIN cap.(I don’t necessarily disagree with you, just want to state my opinion on that.)
I honestly like the way SPIN is going to go forward. How many governance coins has the crypto space seen that are used to stake and secure the networks? Invest into the protocol to make sure the coin is liquid, be rewarded.
I will be voting yes on this though with 200m extra SPINS there is a lot of room for incentive programs. This whole program I feel is in-line with the long term growth that I want to see.
How foolish I was thinking gyroscope will create a better DAO and governance in this space while they making people to pass a proposal with their terms in first attempt.
.