[GIP-42] Accounting locked in Curve LP GEARs in DAO Governance

Proposals
1

Motivation

There are currently ~900 million GEAR in circulation. At the same time, ~100 million GEAR are locked in Curve LP (you can see exact amount here). Many of those who provide liquidity in Curve have participated in cidered liquidity and are active members of the community. Therefore, it seems fair to give them also the right to participate in the Governance.

Implementation

  1. Consider that the LP position has a GEAR in the amount lp_price()/2, where
  • lp_price() is corresponding method in LP pool contract (0x0e9b5b092cad6f1c5e6bc7f89ffe1abb5c95f1c2), it calculates 1 LP price in GEAR.

  1. Take into account Curve LP tokens that user hold on his wallet

  2. Take into account Curve LP tokens that user staked into Curve Gauge

  3. Take into account Curve LP tokens that user deposited or staked into Convex

p.2-4 means that voting power is calculated as sum of balances of 2-4 multiplied on formula p.1:

(balanceOf(CurveLP) + balanceOf(CurveLPs staked in Gauge) + balanceOf(Curve LPs staked in Convex)) * lp_price()/2

Conclusion

I propose to add voting power for Curve LP holders according to the logic described above

Alternative implementation

After discussion the next implementation has been put up for a vote (see discussion below):

  1. Consider that the LP position of user has a GEAR in the amount
    GEAR balance on curve * balanceOfLP(holder) / totalLPSupply()
    , where
  • GEAR balance on curve shows how much GEAR are on LP pool contract (0x0e9b5b092cad6f1c5e6bc7f89ffe1abb5c95f1c2)
  • balanceOfLP - user’s balance of Curve LP tokens
  • totalLPSupply - total Supply of Curve LP tokens
  1. User’s balance of Curve LP tokens (balanceOfLP) is calculated as sum of Curve LP tokens on his wallet, Curve LP tokens staked by him into Curve Gauge and Curve LP tokens staked by him into Convex

Disclaimer

This proposal is to allow governance to function and reach quorums, which have always been hard to achieve - but now almost impossible. As such, while governance remains in the snapshot<>multisig model, some decisions value speed over fine print. Therefore, in case snapshot governance gets attacked due to Curve pool manipulation [this proposal done doesn’t allow for dummy manipulations, but it wasn’t fully audited either] - snapshot admins reserve the right to make a post-mortem and make the attacker proposal void. That is per the rules described in the docs (which have remained unchanged since before the DAO inception Governance Model - Gearbox Protocol). Later on, once governance becomes fully on-chain, any such oversight actions would not be possible or technically feasible. But that’s a question to solve in the next steps. For now, the model improvement suggested should do its job and allow for swift transition.

Voting

https://snapshot.org/#/gearbox.eth/proposal/0xa24c9910bdd6bdbe81a5584768b65e9cbe10dd3f0ab7fecda249c698a5a6c873

3 Likes
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5

Cant agree with CurveLP price evaluation. It means that formula:

GEAR balance on curve * balanceOfLP(holder) / totalLPSupply()

represents much better.

$GEAR as governance token represents voting power which do not depend on its price, so if we share it proportionally across all LP holders it created more fair and clear distribution than based on price.

6

This formula also can be used. The only concern: it is necessary to ensure that there are no attempts to manipulate the price in the GEAR/ETH pool in the proposal creation block. This can lead to the fact that the manipulator will receive a large voting power, while real LPs get less…

7

Suggested solution is excellent for collateral computation, to avoid such attacks as you mentioned it should be a rule, that proposal should be cancelled if someone change his power more than 0.5% (or other constant) less than 100 (or other constant) blocks before.

It’s very simple to check onchain - just read Tranfer events on etherscan or somewhere and make the process clear

8

Fine, I guess this logic can be used too

9

As the Cider and the Curve LP participant, I fully support the idea of allowing LP providers to participate in the governance procedures :slight_smile:

2 Likes
10

As an LP fully support this idea, but feel like we should determine a “check back again” date together.

1- there’ll be way more tokens on the market than in LP in xxx months.
2- it could derail new tokenomics when thats sealed.

Maybe good to check back every quarter and re-decide depending on circulation and tokenomics progress.

1 Like