Astar Treasury Proposal for DOT Festival

[RyoT]

Background
As XCM on Astar is now live, DOT can now be transferred from the Polkadot relay chain to Astar Network. Since DOT has huge potential but lacks utility at the moment, Defi on Astar Network will be the best place for users to stake their DOT. Major Defi protocols on Astar are planning to integrate DOT in the coming weeks and we are planning DOT Festival which aims to boost the users to provide DOT liquidity to such protocols.

The main content of the DOT Festival which starts 5/28~5/30 (still waiting for confirmation) is providing high APR for DOT-related pools on ArthSwap, Starlay, and Astrid DAO. To further incentivize the users to bring their DOT, we are planning to reward ASTR tokens additionally to those who staked on Defi protocols on Astar Network because capturing DOT liquidity is extremely important for our network’s growth.

Therefore, we propose to use 6M ASTR from Astar treasury to reward those who provided DOT liquidity through this campaign.

Timeline of DOT Festival
New protocols will be releasing DOT-related pools in each batch. Each batch is around 1 week.

Batch 1: ArthSwap launches WASTR/DOT pool

Batch 2: Starlay launches DOT pool

Batch 3: AstridDAO launches DOT collateral

(The order of protocol for each batch might change due to development progress)

Reward structure
-All rewards will be split with the LP holders according to the amount each staked. (e.g. If the total reward is 1M ASTR and you owned 10% of the total pool, you will earn 100K ASTR)

-Snapshots will be taken sometime in the last 2-3 days of each batch (the timeline for the snapshot is still being finalized) and ASTR will be rewarded according to the data from the snapshot

-Vesting will be applied to avoid sudden selling pressure (3-month vesting)

Batch 1: 1M ASTR rewards for ArthSwap LP holders (Total 1M ASTR)

Batch 2: 800K ASTR reward for ArthSwap LP holders and 1.2M ASTR rewards for Starlay LP Holders (Total 2M ASTR)

Batch 3: 500K ASTR reward for ArthSwap LP holders, 1M ASTR rewards for Starlay LP Holders, and 1.5M ASTR rewards for AstridDAO DOT depositor (Total 3M ASTR)

What to take into consideration for the reward structure

• We have to structure it in a way that users would like to keep the LP from the previous batch but still stake in new protocols each batch. This means even if Starlay starts DOT pool in the second batch, users still have the incentive to keep the LP on ArthSwap (Not remove all LP). Therefore, we made ArthSwap still applicable for the reward of the second batch. However, we reduced the amount of reward for protocols in the second batch or third batch to create an incentive for users to stake in a new protocol at the same time.
• Vesting will be applied to avoid sudden selling pressure

[RyoT]

Please take a look and comment your thought on this. Thank you all!

[souleater]

Hi Ryo, for the vesting format, I suggest we used linear vesting by block without cliff. What do others say? Any other opinion?

[ERC20s]

I see how this benefits arthswap and starlay holders…
Not sure how this benefits astar holders?

[moonme]

The purpose of this campaign is to encourage DOT holders to bridge their DOT to Astar and rewarding DOT holders who LP on Arthswap and Starlay is one way to do that. Having this will help to boost the network TVL.

If you can find other ways to do this, please share.

[anon24836865]

We can use incentives to attract users to our ecosystem. But eventually, we need to generate “income” to sustain it, i.e., more revenue than the expenses. Otherwise, we will run out of money and crash. We need to generate a value. I think we don’t just need to release high ASTR rewards to attract users to our ecosystem instead we can strong our fundamentals. More, much more. High rewards don’t necessarily mean healthy project in long term benefits. I believe in a token burn of ASTR which is more healthy, keep building better project to attract users due the quality and fundamentals and not by the incentives/rewards. Thank you

[RyoT]

Thank you for sharing your thought on our proposal.
In terms of XCM, we are currently working on a solution that can be true competitiveness and value for Astar in the long run. It is still a challenge for every parachain on Polkadot to come up with an innovative solution using XCM in the short run.
On the other hand, attracting many assets from outside and creating utility in the Astar ecosystem is one of the best ways to utilize XCM in the short run. Therefore, we would like to support the Defi protocols integrating DOT to bootstrap the initial DOT liquidity by incentivizing the users to bring their DOT to Astar Network. We believe that this initiative will be the first step in growing the ecosystem through XCM as the growth of TVL not only means the growth of Astar Network but also Polkadot as a whole. Thank you.

[RyoT]

Hi @souleater ! Thank you for your comment. For on-chain vesting, it will always be linear vesting. Thank you.

[pnpdude]

Thank you for your proposal.

Is it possible for LP on ArthSwap to have DOT/Stable coin? It will help preventing an impermanent loss event a lot during the bear market.

[GuiGou]

From my point of view, incentives are required to bring many users into the blockchain but I am not sure the period is the best one.
In bear market we should focus to build smart features and nice dApps and during the bull run, high APR attracts liquidity providers and users.
I daily use dApps on Astar, so for sure I will benefict of these incentives but in my long term view, I would prefer these incentives come later.

[bumerang]

I wanted to clarify, when we put our Dot, we get only a reward in Astr?
1 But what about 12% in Dot?
2 Is there a reward in Defi tokens? Lay …

Or just a reward in Astr?

[RyoT]

@pnpdude Thank you for your comment. Unfortunately, we do not have control over ArthSwap on deciding which LP to create. It might be better to have such a discussion on ArthSwap Discord. Thank you for your question anyways.

[moonme]

Use The Treasury Funds For This Event

• Yes
• No

[RyoT]

@GuiGou Thank you for sharing your opinion. We are definitely in a bear market at the moment, but in terms of XCM, now is the best time to attract assets like DOT as people are starting to unbond their staking from the relaychain. As I explained above, we are working on a solution that fully utilizes the potential of XCM so that we can attract even more assets in a long run sustainably.

[RyoT]

@bumerang Thank you for your question. It’s not only ASTR rewards but also governance tokens issued by each DeFi protocol if you stake in them.

[pithecus]

Thanks for the detailed plan for the DOT festival! Just an idea that we could do this in a hybrid manner, probably we could reduce the total amount of $ASTR for the rewards by, say, 50%, then the second half would be burnt for having a healthier growth.

Setting it aside, I was curious how you choose the amount distributed at each batch for each project. A total amount seems 2.3M, 2.2M, and 1.5M for ArthSwap, StarLay, and AstridDAO, respectively. Maybe we could bring more TVL if weight a little bit more on AstridDAO and we could expose the AstridDAO to more investors?

Feel free to let me know if you need further clarification or have any questions

[ERC20s]

How is this a fair vote, when someone gives a counter argument and all their messages get deleted?

[ASTARIDN]

yeah im agree with you about this. people can leave …
make valuable tokens healthy and more utility… for strong holder

[ASTARIDN]

I will take part of thisI still have a lot of coin polkadot.
I will fully support the team. do the best for astar !! good luck.

[defiguy]

I really like the idea to create incentives for DOT holders and Astar users, using XCM.
But I’m concerned about the network congestion that we are currently handling, most of the time with RPC on native and EVM with transactions getting stuck (infinite loading).
If we all vote for this festival, we need to be prepared for a constant CRM with very intuitive tutorials/videos and direct contact with Dapps like ArthSwap, Starlay.