AIP 7: New Token System (Voter Incentive)

Migrated from AIP 7: New Token System · Issue #7 · airswap/AIPs · GitHub

Summary

Following recent discussions in the AirSwap community, we introduce an sAST staking token that gives participants the right to vote and to earn protocol fees as a result of their governing the protocol. Participants stake AST to receive non-transferrable sAST at a 1:1 rate.

Voting power is weighted by sAST balance. A new protocol fee mechanism is introduced into AirSwap, with fees generated by the protocol pooled to be claimed by participants proportional to their sAST balance by an output function and only claimable after demonstrated governance activity.

Specification

Staking Contract

A new smart contract with token staking and unstaking functionality.
Source on GitHub

  • Staked tokens are non-transferrable.
  • Participants stake AST at a 1:1 rate.
  • Participants may unstake 10% every 7 days.

Pool Contract

A new smart contract that that holds tokens for withdrawal by participants.
Source on GitHub

  • Protocol fees are taken in a variety of tokens, so there is a variety of tokens in the pool.
  • To withdraw, participants indicate which token they would like to claim.
  • Withdrawal amounts are calculated based on a pricing curve.

Assessing Fees

We propose no changes to the Swap protocol. Instead, MetaMask Swaps will collect the AirSwap fees assessed on AirSwap trades and transfer them directly to the pool contract.

Calling Votes

Voting is run off-chain at https://vote.airswap.io/ using a tool called Snapshot.

  • Participant voting power is weighted by staked token balance.
  • At the completion of each vote, claims are enabled for that vote.

Earning Fees

Participants earn protocol fees from the pool contract by participating in governance.

  • Participants must perform a vote to earn points.
  • Points can be accumulated and do not expire.
  • With points as input, the pool uses a function to determine output. Source

Note: Point values are multiplied by 10**4 to account for decimal places of AST.

(POINTS * BALANCE / (10**SCALE + POINTS)) * (MAX / 100)

By community vote, scale was set to 10 and max to 100. Example output is as follows.

Points Percentage
1K 0.10%
10K 0.99%
100K 9.09%
1M 50.00%
10M 90.91%

For example, a participant that has earned (through one or more votes) 10K points and can claim 12.50% of any one of the pooled tokens. After the initial voting cycle on February 12th, the community may discuss these parameters in terms of expectations and reality. Parameters may be changed by community vote.

Rationale

  • Governance is of utmost importance and we believe that this proposal creates strong incentives for token holders to participate on an ongoing basis.
  • Fees are assessed in a variety of tokens and therefore each participant will have a variety of tokens to claim. The AST+ contract may include a convenience function to convert tokens into ETH prior to transferring to the participant.
  • Liquidity rewards as specified in AIP 3 could be distributed as AST+.
  • This proposal aims to build on AIP 4 and AIP 6.

Copyright

Copyright and related rights waived via CC0.