This draft is intended to collect community feedback to further shape and inform the proposal prior to submission for an on-chain vote.
This proposal aims to launch an incentives program to encourage increased delegation of veRARI. This proposal would both incentivize delegators to delegate their $RARI and encourage delegates to actively seek out delegation. The ultimate goal of this program is to increase the amount of $RARI delegated and the average veRARI votes cast per on-chain proposal.
The Rari DAO should implement this proposal as it would directly increase veRARI delegation and total votes cast on proposals. This will in turn increase the legitimacy of the DAO, shareholder interest in the community, and DAO activity. It will also serve as an additional layer of protection for the community.
$RARI token holders govern the RARI Protocol, control the RARI Foundation treasury, and make decisions for the RARI DAO through on-chain governance. However, currently, very few $RARI are being used for governance. This proposal aims to increase the amount of veRARI used for voting. This is vital for the DAO’s success for the following reasons:
- Low voter turnout is dangerous for the DAO. It makes it easy for bad actors to force malicious proposals through governance by purchasing small amounts of $RARI. This delegation incentives program would increase the amount of votes cast, which in turn would make it far more expensive for someone to buy a vote.
- Increased delegation makes the DAO more active. This creates more excitement in the DAO as it allows for more ideas to be shared and more proposals to be passed. This will add excitement to the DAO and help to attract more contributors.
- Adds utility to $RARI. $RARI is meant to be used to govern the protocol. If more holders are using their $RARI for governance, it legitimizes this use case and therefore incentivizes more people to lock $RARI to take advantage of this utility.
- A large-scale delegation incentives program is rare in crypto. This initiative will draw industry attention and help grow awareness for the RARI DAO.
- Encouraging large token holders to delegate their $RARI tokens will hopefully engage these holders in the ecosystem, which is beneficial for the DAO.
- This initiative incentivizes delegates to become more active and proactively seek delegation. Active delegates are crucial to the success of a DAO as they are the ones working on the day-to-day governance of the protocol.
Delegate - Someone who votes/participates in governance on behalf of themselves or their delegators.
Delegator - Someone who owns $RARI but does not actively participate in governance. Instead, they entrust their tokens to a delegate. This way, their tokens are still actively being used in governance.
$RARI - Rarible’s ecosystem native token, tradable on major exchanges. When locked, it is turned into veRARI tokens, which can be used in RARI Foundation’s governance.
veRARI: veRARI, or vote-escrowed $RARI, is a token you receive in exchange for locking $RARI (which is done automatically when you claim your reward). This token lets you participate in the governance of the Rarible Protocol and RARI Foundation by voting on proposals submitted to the DAO and grants you RARI Prime status.
Delegator Incentives = 0.3(# veRARI delegated during program)*(delegate score)
- Total delegator rewards for round 1 are capped at 30,000 $RARI
- If the 30,000 RARI limit is exceeded, rewards will be distributed proportionally across delegators according to the size of their qualifying delegations
- The delegate score will be calculated on a scale of 0 to 1 based on a delegate’s activity
- A max of 10,000 $RARI can be awarded to a single delegator
- Delegators only receive rewards on the first 7,500 veRARI delegated to a single delegate. (Delegators can make delegations to multiple delegates to achieve full rewards see example)
- Only whitelisted addresses will be eligible for this program based on a snapshot of token holders before the start of this program to avoid a single delegator splitting their RARI into multiple wallets to receive more rewards.
- Rewards will be claimable at the conclusion of the incentive program
Delegate Incentives = 0.058(# veRARI received during program)*(delegate score)
- Total delegate rewards for round 1 is capped at 5,800 RARI
- If the 5,800 RARI limit is exceeded, rewards will be distributed proportionally across delegates according to the size of the delegations they attract
- The delegate score will be calculated on a scale of 0 to 1 based on a delegate’s activity.
Example incentives reward calculations can be seen here
- The tentative dates of the program are Nov 21 - Dec 15, 2023.
- Rewards will be available to claim starting Dec 19, and will be automatically locked when claimed with the following parameters: 6 months lock + 3 months linear unlock.
- Claim URL: rari.foundation/claim
- The RARI Foundation will allocate a budget of 2,000 USD to reimburse gas associated with claiming rewards within the first 30 days.
Delegates will have to confirm their forum account and tally profile to have their delegate score correctly calculated, prior to the start of the program. A snapshot of $RARI holders will be taken to qualify for delegator rewards. A delegate score will be calculated for each delegate using a pre-specified formula to calculate delegate activity. A new front-end feature will be created to display these delegate scores. Rewards will be calculated automatically and distributed to the appropriate delegators and delegates by a smart contract.
Target wallet address for Tally submission: 0xcd9f82fe3b60a5c8482a69279ab5c8d0be19ca24
The proposed timeline for this proposal is to run from November 21st until December 15th, 2023.
Delegator rewards: 30,000 RARI
Delegate Rewards: 5,800 RARI
Operational Costs: 4,200 RARI
- 1000 RARI per working group member for their work in organizing and designing this program (RARI Foundation team waives this fee)
- 200 RARI transaction fee