Yield
TetuSwap
Technical
Second Stage
Work
Past governance proposals
Some governance proposals were made in the past with the aim of improving the development of the Tetu protocol. As the protocol grows and new demands emerge, more governance proposals are expected to be put to a vote by the community.
TIP-009 Reward boost initial percent
This proposal made all rewards accessible to users on an earlier time-frame and also increased profit margins on Tetu's auto-compounding strategies.
The initial calibration of the Reward boost system dictated that 30% of the rewards are immediately accessible, with the remaining 70% unlocking over the next 28 days in a linear fashion. TIP-009 changed the percentages to being 70% immediately accessible, and 30% claimable over time.
Tetu's reward boost system, TIP-001, is in place to prevent the immediate selling of rewards that Tetu provides. It forces you to forfeit a percentage of your rewards if you claim them before your 28 day timer is complete.
This mechanic is a way to prevent TETU depreciation and promote holding the token for long terms, but over time conditions change and the emission curve slows down; providing the option to increase the flow of TETU emissions to users. An additional reason these changes were proposed was that the reward boost system limits the margins that the auto-compounding vaults provide, as they are always going to be claiming with the early penalty.
Reward boost initial percent​
TIP-008 xTETU on Fantom
Through this proposal, profit on Fantom is now split equally between the Profit Share, and TETU-USDC protocol owned liquidity. Tetu's implementation on Fantom network diverged from its original operation on Polygon network. As per TIP-003, the profit that comes from buybacks on Polygon network is split into different sources including: the profit share, the investment fund, and the TETU-USDC protocol owned liquidity.
Tetu on Fantom network started out with all the buyback profit being directed towards protocol owned liquidity. This decision came about to bootstrap TETU's liquidity on Fantom, but came at the cost of low utility for the xTETU token on Fantom. It became apparent that providing a Profit Share for xTETU on Fantom would bring more deposits to Tetu, and so it was enacted that 50% of profit is now directed to the Profit Share, and the remaining 50% directed to protocol owned liquidity.
TIP-007 Tetu Investment in Universe Finance Private Sale
DAO voting held by dxTETU holders decided that $10,000 from the Tetu Investment fund would be put to use and participate in the private acquisition of 333,333.0 Universe Finance Tokens, with a 66% discount to the public offering at the price of $0.03 per UNT (Fully Diluted Value of $30,000,000.0).
Tetu's Investment Fund is provided by 10% of all the performance fees to make investments that bring value to Tetu. This investment opened the doors to an alliance with Universe Finance, which in return has lead to many benefits for Tetu and Universe Finance alike; incentivized LP pairs for TetuSwap, potential collaborative vaults, and acquisitions of tetuQi and TETU tokens by Universe Finance.
Universe Finance is an active liquidity management platform of Uniswap V3 based on risk ranking and quantitative strategies. Universe Finance's focus is to provide effective and innovative solutions for the management of Uni v3 LPs, these solutions seek to serve both users with a more conservative risk profile and users who have a greater risk appetite. Universe Finance seeks to provide Uni v3 LP users with high returns, stable income, low costs and excellent convenience when using the dapps. This convenience is provided to the user through various automated functions such as auto compounding, automatic price range adjustment and lower gas costs to make these adjustments.
TIP-006 Rewards for Fantom network
A portion of TETU's total emissions are stored for use in networks that Tetu branches out to, which can be strategically deployed after verdicts are made within the Tetu community. This proposal made the decision to proceed with TETU emissions on Fantom network in the same fashion it is dispersed on Polygon network, providing it as rewards for vaults. In anticipation of operations on the Fantom network, the decision on how to engage TETU rewards was up in the air. The two options proposed were to either deploy regular emissions, or have a 60 day test period without any TETU emissions.
Distributing TETU rewards is an effective method at attracting new users early on and promotes the growth of the protocol when managed responsibly, however TETU's supply is capped to 1 billion tokens and discretion must be taken with TETU emissions. This means rewarding TETU emissions alone is not sustainable in the long run, however Tetu is being designed in such a way that emissions are not needed for the self-sustainability of the platform.
The arrival of Tetu on Fantom network gave the opportunity to test what Tetu without emissions would look like; how much utility and funds it would bring in this "emission-less" state, or to provide the same emission experience that Tetu offers on Polygon network. Ultimately, the decision was made to provide emissions in the same way as Tetu on the Polygon network.
TIP-005 New Profit Sharing ratio
The PS ratio is an economic parameter of Tetu protocol that can be adjusted between 0% ~ 100% Tetu was released with the PS ratio in effect at 100% which means that all rewards produced by the vaults would be distributed in the standard flow with 0% of the rewards produced by the vaults being distributed to the underlying vault. This generated a high performance for xTETU generating an effective balance due to the incentives distributed to the vaults.
It is expected that over time the PS ratio will adjust more in favor of auto compound vaults rather than xTETU so that the attractiveness of the vaults is preserved. This is a measure that theoretically works in a counter-intuitive way, reducing xTETU holders' gains at present to obtain bigger and more reliable gains in the future due to self-sustaining productivity of vaults.
The PS ratio is managed in order to balance the productivity of the vaults with the incentives distributed to keep the vaults attractive and the decision to keep the PS ratio or change it is made through DAO voting by the dxTETU holders. By preserving the profitability of the vaults users will have a financial preference to use Tetu over other platforms.
TIP-004 External Auto Compound
The proposal called on dxTETU holders to provide a 100% reward boost level to partners wishing to yield farming TETU based vaults. No yield farming would be whitelisted for vaults without TETU.
The DeFi market can take advantage of several growth opportunities through the development of partnerships, through mutual cooperation it is possible for two parties to reach a good result. It is often in the interest of protocols to take some care to not be farmed by external protocols or at least maintain some control over the threshold at which external protocols can Yield Farming on the native platform in order to avoid protocols that do Yield Farming to sell rewards and leave without creating solid positive effects for both protocols.
Tetu exercises this protection against yield farming from external protocols so that protocols wishing to farm TETU have to be whitelisted. Building on the principle of mutual benefits obtained through cooperation, the External Auto Compound proposal presented to the community terms in which Tetu actually would benefit from mutual benefits by granting yield farming permission to external partners such as Harvest Finance. External partners would benefit from farming in TETU-only auto vaults receiving an attractive APR to auto compound the underlying, while Tetu would benefit from the prospect of increased deposits provided by this flexibility of partnerships and an increase in buying pressure on the price of TETU due to the increase in demand for Yield Farming of TETU caused by users of other platforms.
TIP-003 Protocol Owned Liquidity
The automated yield aggregation and distribution is an interesting concept capable of providing a new investment management experience for Yield Farmers.
With the previous solutions of old challenges and the progress of the Tetu protocol the Yield farming experience in Tetu got even more interesting and the community presented solutions to problems that took on higher priorities, such as the low liquidity of the native TETU token.
Lack of liquidity is a major annoyance both for investors who want to build a large TETU position and for users who want to take profits or make a new reallocation of capital. A solution was needed to improve TETU's available liquidity. Some options in the governance proposal were presented and the solution chosen by dxTETU holders was to use a part of xTETU buyback to build a protocol owned liquidity position.
The result of this solution is that TETU liquidity will grow over time as buybacks keep happening until slippage is no longer an issue for users.
TIP-002 Diamond Vault
xTETU is the core mechanism of the Tetu system. We realized that Yield Farming's automated profit aggregation and distribution mechanism could be even better with a locking system capable of providing even more profit to users. So dxTETU was conceived as the locking solution for xTETU.
Inspired by the success obtained from the Reward Boosting system, dxTETU was designed in a similar way, providing an environment where users can withdraw the deposited principal at all times, however there is no mathematical sense in not respecting the locking period until the end of its duration. dxTETU holders gain additional dxTETU that are obtained from users who decide to leave the vault before the locking period takes place.
The dxTETU governance proposal decided what the Diamond Vault locking duration time would be, in general the longer the locking period the more opportunities the dxTETU holders will have to get dxTETU from users who leave before the locking duration period.
The locking system creates an environment where long-term commitment to the protocol ends up being incentivized and rewarded, thus dxTETU has also become Tetu's governance token. The commitment to lock xTETU for at least 90 days to ensure protection against loss of principal prevents situations where users buy TETU, or move TETU from LP positions to xTETU to participate in governance proposals and then sell tokens or reallocate to the original position. The result is that dxTETU works in a simple and effective way that avoids governance manipulations.
The dxTETU is a vault that can be used very flexibly by the Protocol, it can be incentivized with xTETU to encourage long-term commitment and active participation in protocol governance, and it can also be used as a vehicle for sharing profits from partnerships.
TIP-001 Reward Boosting System
Tetu's first governance proposal was the creation of the Reward Boosting system. During the launch of the Tetu protocol many TETU rewards tokens were being distributed against an initial liquidity pool that had a very high token price. The result of this initial dynamic was not very surprising, the TETU token was under very strong sell pressure, so that the first users of the protocol were more focused on the price and volatility of the native token, than on the benefits that the protocol could provide through the aggregation of yield farming income.
Thus, the Reward Boosting System emerged as a very interesting idea to add a game theory element to TETU's Yield Farming in a way that provides the user with a balance of options between claim less rewards immediately or wait a little longer and collect all the TETU yield farming rewards with additional reward boosting from other users who claimed earlier. After the implementation of the Reward Boosting System, the TETU token achieved a little more stability and less volatility.
The result obtained by the Reward Boosting System was surprising and with the success of this new dynamic, users can reflect on more options to do with their TETU reward tokens without worrying about huge price instability and earn more rewards from other users who claim too early.
Last modified 27d ago
Export as PDF
Copy link
Contents
TIP-009 Reward boost initial percent
TIP-008 xTETU on Fantom
TIP-007 Tetu Investment in Universe Finance Private Sale
TIP-006 Rewards for Fantom network
TIP-005 New Profit Sharing ratio
TIP-004 External Auto Compound
TIP-003 Protocol Owned Liquidity
TIP-002 Diamond Vault
TIP-001 Reward Boosting System