FIP 20 - Stake DAO Gauge

Hey everyone,

The next gauge we’d like to propose is a Stake DAO gauge. As you probably know, the Stake DAO AMO (which is a variant of the Curve AMO strategy with deposits going to Stake DAO’s FRAX strategy) has over $54m in TVL currently. It is the 2nd largest AMO by usage/revenue.

Summary:

Add a Stake DAO FRAX strategy gauge.

Background & Motivation:

Our Stake DAO partnership has been quite successful and mutually beneficial. Our friends at Stake DAO have voted for FRAX with their veCRV and FRAX has successfully used Stake DAO’s custom FRAX strategy vault to increase the protocol’s AMO profits. I’ve also appeared on their podcast recently and had a great time discussing FRAX development and future integrations. You can listen to the episode here: https://twitter.com/StakeDAOHQ/status/1433807001260281857?s=09

Recently Stake DAO expanded their retail FRAX strategy and we think it’s a great idea to boost adoption for this strategy with a gauge.

Benefits of this gauge:
1.) It essentially incentivizes more FRAX Curve liquidity since Stake DAO takes FRAX3CRV LP as deposits similar to Curve/Convex.
2.) Stake DAO is a whitelisted protocol that can stake veFXS so it will be in Stake DAO’s interest to build up the gauge weight for this in the future.
3.) Expand on our already successful partnership before which has gotten FRAX a lot of veCRV votes and Stake DAO $50m+ of TVL.
4.) Stake DAO can further incentivize this gauge with SDT rewards, doubling the token rewards for users.

For: Add gauge

Against: Do nothing

4 Likes

Hi Sam,

Would you mind explaining the difference between rewarding an AMO with FXS rewards and a pool?

Also, can you elaborate on bullet 2 please? Is it the plan that Stake DAO will build up the FXS rewards and stake them in veFXS?

Is the Stake DAO AMO a “protocol pool”, where the rewards goes the protocol, or is it a “user pool” where the rewards goes to the individual stakers?

Thanks.

Good questions, let me explain:

1.) This is not rewarding an AMO, it is purely for Stake DAO’s FRAX retail strategy.

2.) Yes, the goal is that Stake DAO will build up the gauge weight by locking FXS since it would be good for them and entice a lot of retail deposits.

3.) No, it isn’t a protocol pool, it is for their retail strategy. Everyone would be able to deposit into it.

Hope that clears things up :slight_smile:

I’m in favor of this proposal! Building and strengthening mutually-beneficial relationships is great for the Frax Protocol. Furthermore, adding dual-incentivized pools helps us increase TVL and demand for Frax without as much pressure on FXS.

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Thanks, I understand now.

What you are saying is that in order to get investors to lock in even more FRAX into the Stake Dao (FRAX strategy), then we want to subsidize the pool via FRAX’ guage system.

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Yep exactly. I think it will be a big success :slight_smile: