AELIP-22: OP Distribution

Author
StatusImplemented
ImplementorTBD
ReleaseTBD
Created2022-05-20

Simple Summary

Aelin Protocol has been allocated a grant of 900K OP tokens in total. This AELIP proposes the following distribution plan:

  • 40% to LP stakers (AELIN/ETH), or equivalent program to maintain liquidity on the AELIN/ETH pair
  • 60% to a pool incentive program. Each new pool created on Optimism over $100,000 will be eligible for OP rewards if not disavowed by the Aelin council (see AELIP-21). An amount equivalent to 3% of the total value of the pool will be distributed at pro-rata to investors who accepted the deal.

Abstract

Incentivising LPs is essential to keep the liquidity for AELIN at an adequate level in order to protect investors from too much slippage when interacting with AMMs on-chain. So it is important to keep a sufficient amount of the OP allocation as a reward for those willing to assist maintaining this liquidity. A clearer explanation of this program will be written in another AELIP.

The pool incentive program will provide a 3% rebate of all accepted deals on the Aelin protocol. This amount will be sufficient to fully cover the Aelin protocol fee of 2% as well as an additional 1% which may offset the sponsor fee (if applicable) or simply provide an additional incentive to invest in the deal to obtain additional OP tokens. Aelin expects several deals will be conducted on the protocol over the next several months which will require investors to migrate capital to Optimism to participate in a meaningful way as the deals may be oversubscribed and require additional capital to attain their desired allocation in the deal.

This incentive gives investors increased motivation to participate at a significantly reduced cost. It doesn’t have a time limit; however, is expected to support tens of millions in deal volume depending on the value of the OP token when the deal is accepted.

The pool incentive program will be starting on July 7th. Every pool created after that date will be eligible for the OP tokens distribution. If the grant is sent later after the start date, rewards will be distributed retroactively.

Motivation

Users who have already bridged to Optimism tend to stay and remain active, the key is to provide sufficient motivation for new users to bridge in the first place.

Incentivising both liquidity providers and investors on Aelin will likely drive significant liquidity to be deposited onto Optimism. We expect a very high retention of this liquidity as new users discover the range of protocols that are already deployed to Optimism. Additionally, many of the deals conducted on Aelin include vesting terms which require the capital to stay on Optimism.

Specification

Overview

The proposal will be submitted per the Optimism network guidelines.

Rationale

N/A

Technical Specification

Same as overview

Test Cases

TBD

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