Summary
The pSTAKE team proposes to allocate 12 M PSTAKE tokens from the Incentivisation and Community Development Fund to incentivise multiple initiatives during the launch period of stkBNB to create traction and adoption immediately after launch. To achieve this, a part of the PSTAKE token supply will be bridged from Ethereum to the BNB Chain.
The below table gives an approximate allocation of tokens (subject to change due to token price):
| Protocol | Type | $PSTAKE tokens | Incentive Duration |
|---|---|---|---|
| PancakeSwap | DEX | 4,000,000 | 60 days |
| Alpaca | Leveraged Yield Farming | 4,000,000 | 60 days |
| Other | Various | 4,000,000 | 60 days |
| Total | 12,000,000 |
Introduction & Rationale
With the stkBNB product set to launch within the next two weeks, the team has been working closely with major protocols in the BNB ecosystem to ensure integrations of the stkBNB token. The goal of these early integrations is to make important DeFi use cases available for the pSTAKE users on the BNB chain soon after the launch, ultimately resulting in a wider user base and product adoption.
Details of each integration & allocation
PancakeSwap
PancakeSwap, a Decentralised Exchange, is the largest and most renowned dApp in the BNB ecosystem with a dominance of around 50%. For stkBNB, the goal is to launch two liquidity pools on PancakeSwap from the get-go:
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stkBNB/BNB: This pool is critical for PSTAKE users to be able to swap out of stkBNB instantly (instead of waiting for the unstaking period of 15 days). Besides, it is also critical for many further integrations in the BNB Ecosystem, where automated strategies rely on being able to swap high volumes of stkBNB easily and with low slippage.
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PSTAKE/BUSD: As the aim is to get BNB chain users to become PSTAKE users and token holders, there needs to be an option for users to acquire the PSTAKE token on the BNB chain. Besides, the PSTAKE tokens that are given out to users of the various integrated protocols (via the incentives discussed in this proposal), need to be tradable on the BNB Chain. With BUSD being a widely used token across the ecosystem, the PSTAKE/BUSD pair will ensure easy trading routes for the users.
To get both of the above-mentioned pools included in the farming offer of PancakeSwap and get CAKE allocated to these farms as incentives, PSTAKE tokens will need to be allocated to a Syrup Pool on PancakeSwap, where CAKE stakers will receive PSTAKE rewards. The requested allocation to get a high CAKE multiplier for the two pools, and thereby provide high yields for LPs is 4 M PSTAKE tokens.
Alpaca Finance
Alpaca Finance, a leveraged yield farming protocol, is the third largest protocol in the BNB ecosystem. It provides users the option to use undercollateralised loans to leverage up their positions in yield farms, thereby increasing capital efficiency. pSTAKE team will be creating two yield farming opportunities on Alpaca using the two pools on PancakeSwap -
- stkBNB/BNB yield farm
- PSTAKE/BUSD yield farm
The yield farms bring interesting opportunities to stkBNB and PSTAKE holders. For example, by borrowing one asset (BNB), to leverage up on an LP position, users can effectively go long stkBNB and short BNB, which can result in some interesting risk-reduction strategies as stkBNB will continue to appreciate against BNB.
The yield for users will primarily come from the yield on the PancakeSwap pools. Users holding leveraged positions will also earn ALPACA rewards. In return, Alpaca stakers will get extra yield in the form of PSTAKE tokens via the Grazing Range on Alpaca. The proposed allocation for this Grazing Range pool is 4 M PSTAKE tokens.
Other integrations in consideration
The pSTAKE team is considering integrating with some of the largest protocols in the BNB chain ecosystem -
Beefy Finance
Beefy is a multi-chain yield optimiser platform that allows users to earn compound interest on their holdings. Beefy offers its users a range of investment strategies secured and enforced by smart contracts. By integrating stkBNB with Beefy, users would get easy access to DeFi strategies opened up by the new use cases introduced by stkBNB. For example, with a single transaction, users can deposit BNB, after which Beefy would convert 50% to stkBNB, provide both as liquidity into the PancakeSwap pool, farm, swap, and reinvest rewards automatically at regular intervals. pSTAKE is considering using the Boost functionality of Beefy to provide external incentivisation for user adoption.
Wombat Exchange
Wombat, a multi-chain stableswap protocol, has developed a novel mechanism for liquid staked token swaps, where users can provide single-sided liquidity with a liquid staked token. By using a stableswap mechanism, users can enjoy high-volume trades with low slippage. This is also important to ensure further integrations with Borrowing/Lending Protocols where efficient liquidations are required. The liquid staking pools and the incentive programs are expected to go live in mid-August.
Venus
Venus is the largest Borrowing & Lending protocol in the BNB chain ecosystem. Similar to Compound on Ethereum, users can deposit tokens as collateral and borrow against them. The ability for users to use stkBNB as collateral enables leveraged liquid staking. Besides, having yield-bearing assets as collateral opens up the door to self-repaying loans, something which will be researched together with the Venus team. Borrowing & Lending of assets is incentivised by XVS. An external PSTAKE incentive program will also be considered.
Along with these protocols, the pSTAKE team is also looking to integrate the stkBNB token with use cases like options, margin trading, and more. The team proposes to allocate 4 M PSTAKE tokens for incentivising the early users of stkBNB on these platforms in order to facilitate use cases for the stkBNB token.
Bridging of $PSTAKE
Since PSTAKE is looking to gain traction and adoption in the wider BNB chain community, it is crucial to have the PSTAKE token available on the BNB chain (currently it is an ERC-20 token), similar to how a part of the PSTAKE token supply was bridged to the Persistence Chain. Following initial research, the team identified 3 candidate bridges or bridge infrastructure providers: deBridge Finance, Celer Network (cBridge), and Axelar Network. Upon further in-depth research and conversations with each of these teams, it was decided that the Celer Network (cBridge) is the best solution to bridge PSTAKE tokens from the Ethereum to the BNB Chain.
Flexibility of allocation
The allocations for different protocols mentioned in this post are based on the current market price of PSTAKE tokens. The exact allocations will fluctuate based on the negotiations with the respective teams as well as the token price at the time of the integration. Any unused tokens will be refunded to the Incentivisation and Community Development Fund.
Mechanics
Upon acceptance of the proposal, 12 M PSTAKE tokens will be transferred from the Incentivisation and Community Development Fund wallet to the following safe address: 0xf90C522d13641681A8f9f550f511D6bfBE363a69
The multi-sig holders of the wallet are:
- Tushar Aggarwal - Founder and CEO
- Mikhil Pandey - Product Lead
- Pratyaksh Inani - Research Lead
Proposal is now live here - Snapshot