Reduce unrealistic FDV and give GEL healthier valuation so all stakeholders can benefit from it

100% with you on securing enough capital for the protocol development. Sorry that I’m obviously not up to speed with the financing of Gelato.

The sound of minting tokens beyond the initial promised max supply does seem scary, and I agree with @3.1415r that it would open a door that shouldn’t have been opened as then it becomes hard to argue where the line is and most likely we would lose quite some credibility.

By all means, if Gelato needs funding, then the 50% of the total supply currently sitting in the treasury should definitely prioritize that. Depending on the level of growth we need the funding for, but my sense is that our current treasury should suffice, even if it means that bulk of it will have to be sold. And minting beyond the max supply is something that can very well be detrimental to Gelato both as a protocol and a DAO on multiple fronts.

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Hi all,

Great discussion here,i find all points valid but what i realize is that protocol’s long term development and current(or past from TGE till now) investors and holders incentives do not align.

Protocol needs extra GEL to enter the market in order scale up , this will result in diluting the current investors to some smaller or bigger degree. As has been done in the past also.

I understand all the reasons and might be the correct approach for the protocol and its long term goals, however the reality for most retail investors who were here from early stages and believe in the team and the concept is that (excluding SPICE allocation and airdrop, we hope the best but it is another story) everyone is under his initial investment a year after holding GEL.

And that for true believers is a bit harsh.

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small case study input from my end here. The table shows the circ. supply change for Euler Finance (which i think Gelato infra should tab into).

The EUL token unlocks linearly in block by block manner and the unlock happens in all parts of the allocations. By the 18th month since the token launch, the estimation is about 56% of total issuance will be in circulation. it is also the time when all investors’ allocation gets fully vested.

i think Gelato can learn something from here. as hilmar mentions above perhaps accelerating the investor vesting might actually be good. it has been a bit over a year since GEL was launched yet we seem to be not even close to 50% circ. rate which from my view, the token as a whole is quite stagnant in terms of circulation.

TLDR; sudden circ bomb drop bad. steady token stream to circulation good (maybe)

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Yes: Accelerated vestings

Especially good for the decentralisation of GEL ready for when staking and such becomes live.

No: Token Burn

Gelato needs these funds to keep developing, and would just mean minting more tokens in the future.

Definitely not: Minting new tokens beyond Max Supply

The max supply should be the MAX supply. It would be detrimental to Gelato’s image if this were to happen imo.

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Strong agree

This is potentially where a referral program or a targeted developer contest / hackathon might be worth exploring. It’s difficult to talk about any of these matters though in the absence of additional clarity around revenue model and what token mechanics will look like

Agreed, assuming there’s proper legal coverage and protection for core Gelato contributors + community members.

Interesting question raised here on whether max token supply caps make sense aside from very specific scenarios like Bitcoin. Even then, there’s lingering questions around potentially introducing tail emissions for economic sustainability.

Olympus DAO bonds also another option. And could set parameters to allow users to choose trade-offs between steeper discounts to market price vs. longer bonding (or vesting) period to liquidity.

Really cool and thank you for sharing this analysis. Seems like impact wasn’t terrible just eyeballing EUL/WETH ratio, though with this stuff it’s always hard to isolate impact from any one factor.

Curious @RiptoTheCrypto what you think Gelato’s “image” is? I think I’m a bit more open-minded on the max supply than other folks here seem to be. Generally of the POV that the span of emissions should roughly align with timeline to protocol maturity & ossification, which makes it a notoriously tricky parameter to nail.

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Good feedback. My two cents:

  • Regardless of the format how OTC is conducted, I think there has to be a sufficient compromise if $GEL from treasury will be sold with a discount, e.g. a vesting schedule for the purchased tokens. We previously did a bond sale on Olympus Pro for POL and the outcome was somewhat half-half, and analyses from other protocols that did the same ops suggest that it’s most likely going to be taken advantage of by mercenaries. If Gelato can secure a reasonable deal with institutions / angels that the community also feel content with, I guess that’d save a lot of work in terms of funding the protocol.

  • I for one believe that we are way too premature to talk about raising max supply right now. Treasury has 50% total supply that should be able to finance the development for a while. What I do feel concerned about is the possibility of adding unnecessary complexities to the system once we decided to mint more. The last thing I wanna see is $GEL becomes some kind of rebase token with theoretically infinite supply if we can just mint new tokens out of thin air arbitrarily. For whatever reason, if we crossed that line and did it once, then there is basically no certainty why we can’t do it again and again. There can always be a new reason. Maybe if we come up with some kind of EIP-1559 type mechanism, then minting might be somewhat justifiable, though that’d be a ton of work just to design a proper tokenomics to implement such mechanism. All in all, I don’t think we should ever go into that route.

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Very fair concerns. Do you know what the max bonding period is for Olympus Pro? If it’s just a few days or weeks, agree not very interesting as an option.

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I think that’s something customizable. The good thing about using a product like Olympus Pro is that it’s permissionless and we don’t need any social coordination. On the other hand, if we are talking about investing a rather significant amount into buying treasury holdings, some credibility and accountability of the purchasers might be necessary since it’s intertwined with the wellbeing of the protocol.

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Agreed. This is an unrelated topic from accelerated vesting, but yes any sizable sale of treasury tokens via Olympus Pro (call it >1% of circ supply for argument’s sake) should definitely be run by community and maybe put up to a formal gov vote on parameters/size/etc.

Permissioned large token sales to KYC’d (or identifiable) entities should receive equal or more scrutiny.

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hi @hilmarx

thank you and the community for the amazing discussion. many good ideas. what do we do now? let’s make a proposal about release investor token early?

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Agreed and thank you for sparking the discussion @hidden_hands :innocent:

I think we should move to Snapshot vote and give it a few days at least so people have time to weigh in.

Would also encourage the Gelato core contributors and members of community to publicize this vote to spur high voter participation (not optimistic tbh given historic turnout patterns but this feels like a critical vote and people should voice their opinion one way or another).

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On second thought, we should have a more concrete proposal in place with explicit steps & details before we proceed here.

See this message from @Dan from the tg:

At the moment that thread exists as discussion only for the community and investors to come together and discuss different approaches and ideas.

You can already begin drafting a generalised proposal that follows the correct formwork which covers the multitude of options that were discussed (within reason) referencing the previous post.

This should include a few options and the purpose of this would be to implement structure for the different approaches, as well as gauge the general consensus and sentiment around the outlined proposal

Including a poll would help also visualise this.

I can get this started over the next week or so. Please DM me here on the forum with your telegram username if you would like to be involved in the drafting of this proposal.

I am separately engaging with OTC desks & relevant counterparties who could help facilitate execution of this should accelerated-vested current investors wish to exit their $GEL position.

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I like this idea a lot. Why VCs though? There are investment DAOs that probably would be interested in this and at a reasonable discount to market price, this would have literally zero price impact.

Also…what about a permissionaless DAO-2-DAO tokenswap via Hedgey Finance…with 1 or more other protocols that are mutually aligned in seeing $GEL do well?

Also, how about considering some additional liquidity mining incentives that could be matched with said new partners as well on Layer2 networks like Optimism and Arbitrum?

I think these could be powerful campaigns to kickstart this process and improve the current situation.

:ice_cream:

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Sure, it wouldn’t just be VCs and don’t see why investment DAOs or DAO counterparties shouldn’t be involved. For example, someone like Reverie would be high value-add: https://www.reverie.ooo/

Well that would effectively be like a treasury sale. I think the more pressing topic at hand is dealing with the vested portion of the FDV overhang (aka secondary market transactions).

Sure as long as they’re not farmed and dumped. Given Gelato is not a defi protocol or directly reliant on liquidity for its operations, the goal of any incentives like this would be to incent node operators to run infrastructure on L2s and potentially to incent L2 protocols to integrate / use Gelato. Token emissions (along with stuff like airdrops) for incentivization of adoption does need to be carefully considered given most efforts like that produce benefits that tend to be short-lived in nature (see: most of defi summer)

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Great ideas all around. Sharing my 2 cents.
Many great points shared. Would like to put forth points not discussed till now. Maybe I will go slightly off topic too. forgive me.

  1. Use based token sink is generally organic and slow. Can we look at expected rate of tokens being locked up by protocols for use vs tokens unlocked each vesting cycle?
  2. Need to create sinks which absorb more gel and can handle vested token dumps
  3. Sinks - Bonding(Temp), Validator model (Staking for rev share) - This expands utility,
  4. Consider token burn ONLY if team has 4 years runway in USDC
  5. Dual pools with partners already using the service(use it , to attract their larger communities to our cause). Real yeild tokens are a thing now.
  6. Marketing needs a major tuneup - Unable to create noise with a great product and execution. Marketing