BIP #31 Reward BEND tokens to users participating in ApeStaking V2

#1

BIP: #31

Title: Reward BEND tokens to users participating in ApeStaking V2

Idea(BRC):Discord

BIP by: NFTLZ.ETH#0717

Created: 2023-05-31

Status: Community Review

BIP Editor: NFTLZ.ETH#0717(**@**defiandnft)

Abstract

Proposal for BEND token rewards for ApeStaking V2 users. Three main plans have been collected:

Plan A: Calculate user loyalty and distribute rewards based on loyalty.

Plan B: Calculate the proportion of asset share to total share, similar to the lending reward method, with three different share calculation methods:

  1. NFT shares are equal to APE token shares, i.e. 1NFT = the number of APE tokens paired with it. For example, 1BAYC is calculated as 10094 APE tokens.
  2. Calculate shares dynamically based on the official staking pool’s APR. Based on the current APR, 1BAYC is approximately equal to 10094 X 3 APE tokens.
  3. Calculate shares dynamically based on the official staking pool’s APR, only rewarding NFTs.

Plan C: Gas fee subsidy activity for users using ApeStaking V2.

The following are detailed information on the three plans:

I will collect community members’ suggestions for improving BIP#31 and answer any questions regarding this proposal.

Plan A

Background

On December 5th, 2022, Yuga Labs officially launched its APE asset staking activity with the help of Horizen Labs.
ApeStake.io is the official staking protocol for ApeCoin ($APE) established by the ApeCoin DAO (ApeDAO) and was created as a way for $APE, BAYC, MAYC, and BAKC holders to earn rewards through staking. $APE can be staked by itself or in conjunction with a BAYC, MAYC, or BAKC in one of the four staking pools, with each pool offering different levels of rewards.

BendDAO launched the paired staking feature for ApeStaking on December 11, 2022, allowing NFT holders to pair with APE token holders. Upon successful pairing, BendDAO protocol will deposit the assets into apestake.io for staking.

Since the launch of the paired staking feature, BendDAO team has been collecting feedback from the community. Based on market research and user feedback, they have developed V2 of ApeStaking which includes:

  • Pool-to-pool automatic pairing
  • Automatic compounding

Users do not need to pay any gas fees for pairing or compounding and do not need to perform any operations. Simply deposit assets into BendDAO and all other actions will be automatically completed by the BendDAO protocol.

Motivation

BendDAO aims to provide paired staking services for ApeStaking users. As of May 23, 2023, the assets for ApeStaking’s paired staking are as follows:

image
image2000×906 132 KB

Meanwhile, the protocol charges a 4% service fee on each staking income, and the treasury has received approximately $350K in service fees.

As Yugalabs’ ApeStaking activity will last for three years, during which new projects serving ApeStaking will continue to be launched. In order for BendDAO to seize more market share of ApeStaking and bring more revenue to the protocol, it is recommended that BEND token incentives be given to users who use ApeStaking V2 after its launch.

Proposal

Incentivize users with tokens based on their loyalty, using the season as a cycle.

Basic Information

Incentive Token: BEND

Source: BendDAO Treasury

Incentive Cycle: Season 1, lasting for 3 months + 1 week

Eligible Users for Incentives: Users who use ApeStaking V2 during Season 1

Token Release Schedule: The incentive tokens will be released linearly over a period of 6 months after the end of Season 1.

Incentive Rules

A points system is used, and at the end of each season, the total points earned by each user are calculated. The number of BEND tokens that can be obtained is determined based on the proportion of individual points to total points.

How to earn points:

Users can earn points by depositing NFT or APE tokens into ApeStaking V2.

How are points calculated:

  1. Users’ basic shares are calculated in APE tokens, while NFTs are calculated based on the number of paired APE tokens. For example: 1 BAYC = 10094 APE.
  2. Users holding veBEND can receive bonus points. To receive a bonus for every 1 APE deposited, users must hold 10 veBEND.
  3. The longer the deposit time, the higher the bonus point multiplier.

Bonus point multipliers (based on asset deposit time):

  1. Deposits held for 90 days or more will be multiplied by 2.
  2. Deposits held for 60-89 days will be multiplied by 1.5.
  3. Deposits held for less than 60 days will be multiplied by 1.
  4. Holding a corresponding amount of veBEND earns an additional 0.5x multiplier.
  5. Points = deposited APE quantity x duration x (duration multiplier + veBEND multiplier).
Period(days) Points Bonus Hold veBEND
<60 X 1 + 0.5
>60 and <90 X 1.5 + 0.5
>90 X 2.5 + 0.5

Test Cases

Case 1. Deposit 10,000 APE tokens without using auto-compounding, with a deposit time of more than 3 months and holding 100,000 veBEND tokens. The total points earned will be 2,250,000 (10k tokens x (2+0.5) x 90 days), considering the bonus for holding veBEND tokens.

Case 2. On day one, deposit 10,000 APE tokens without using auto-compounding. On day ten withdraw 5,000 APE tokens and on day thirty deposit another 7,000 APE tokens until the end of the event. The total points earned will be 1,580,000 ((10k-5k)x2x90 +5000x1x10 +7000x1.5x60).

Use auto-compounding and calculate the number of tokens deposited each time along with their respective duration.

Token Quantity

BIP#31 only discusses the incentive plan. If it is approved, we need to apply for the amount of Bend required in the incentive activities of Season 1.

Incentives for V1 Users

Whether to reward V1 users and how to do so is not discussed in this proposal. I will initiate a separate proposal to discuss compensation or incentives for V1 users.

2 Likes
#2

For the calculation of NFT share above, 1 BAYC = 10094 APE, but in practice, the benefit of using NFT with APE tokens for paired staking is greater than the benefit of APE tokens for single token staking. For the calculation of NFT share, the following method can also be used:

The share is calculated based on the APY. The share of NFT is calculated based on the ratio of the APY of the paired staking of NFT + APE tokens to the APY of the single token staking.

Test cases:

Case I. BAYC + APE tokens paired staking yield is 100% APY and APE single token staking yield is 50% APY, the share of BAYC is 10094 X (100% / 50%) = 20188.

Case 2. BAYC + APE tokens paired staking yield is 100% APY and APE single token staking yield is 120% APY, the share of BAYC is 10094 X (100% / 120%) = 8411.66.

#3

A couple clarifying questions:

  • v2 will continue to accrue a 4% service fee for our treasury just like v1, correct?
  • Are apes used as loan collateral also eligible to participate in the pool and earn these incentives?
  • You mentioned a bonus for holding 10 veBEND. Is this 10 veBEND per $APE? Meaning, if one is staking 1,000 $APE they would need 10,000 veBEND to maximize the boost?
#4

  • v2 will continue to accrue a 4% service fee for our treasury just like v1, correct?
    => Yes, 4% service fee for the claimed rewards, it’s the same with v1.

  • Are apes used as loan collateral also eligible to participate in the pool and earn these incentives?
    => Yes, apes used as loan collateral need to do the migration from lending pool to staking v2 pool + lending pool, after the migration, apes can earn double incentives from both pools.

#5
  • You mentioned a bonus for holding 10 veBEND. Is this 10 veBEND per $APE? Meaning, if one is staking 1,000 $APE they would need 10,000 veBEND to maximize the boost?
    => Yes, to get an additional 0.5 boost, 10 veBENDs are required for each APE.
#6

In my case, Vebend wallet and Apestaking wallet are not in the same wallet, can I also get this reward in this proposal?

#7

Plan B

Motivation

Due to the complexity of calculating and justifying incentive schemes based on loyalty, and we have launched some features of ApeStaking V2, In order to quickly launch our BEND token incentive campaign, I have prepared another incentive plan:

Basic Information

Incentive Token: BEND

Source: BendDAO Treasury

Incentive Cycle: Season 1, lasting for 3 months

Eligible Users for Incentives: Users who deposit NFT or APE tokens can instantly receive BEND token rewards, following the same incentivization method as Lending.

Incentive Rules

How to calculate shares:

Shares are calculated based on APY, using the ratio of the APY for NFT+APE token pair staking and the APY for single-token staking, to calculate the share of NFT.

Test cases:

Case 1. If the APY for BAYC+APE token pair staking is 100% and the APY for APE token single staking is 50%, then the share of BAYC is 10094 X (100% / 50%) = 20188.

Case 2. If the APY for BAYC+APE token pair staking is 100% and the APY for APE token single staking is 120%, then the share of BAYC is 10094 X (100% / 120%) = 8411.66.

How to obtain APY data:

The specific method of obtaining APY data is determined by the team. It can be read per block or per week, depending on the difficulty of the code.

How to calculate rewards:

User’s deposited assets X multiple of APY = User’s share

BEND token rewards issued per block X the percentage of the user’s share of the pool’s total shares = the reward the user receives per block.

Incentive Token Amount

Basic Data

image
image2000×446 115 KB

Incentive Token Quantity: 50M, Incentive Period: 3 months

image
image2000×391 186 KB

Assuming no changes to the basic data, we can offer incentives in BEND tokens up to around 5-16% APY once ApeStaking’s TVL reaches approximately 20M.

For Plan B incentives, we can offer high APYs during the initial launch of the protocol to attract users to deposit their NFTs and APE tokens.

If you have questions or suggestions, please do not hesitate to leave a message for discussion.

1 Like
#8

Yes, on-chain incentives like lending incentives are simple and straightforward. An even simpler rule could be as follows:

  • Split the total incentive into two parts, for example, 30% for Apecoin depositors and 70% for BAYC/MAYC/BAKC depositors.
  • BAYC/MAYC/BAKC depositors split the 70% in a ratio corresponding to the paired Apecoin amounts, which is 10094:2042:856.
  • The ratio between Apecoin and NFTs can be voted on by the community once a month based on actual data.

With this rule, given the same incentive amount and estimated TVL of staking V2, the final APY would appear as follows:

image
image1840×374 70.7 KB

It appears that BAYC has a higher APY, but remember that the data provided is merely an estimation, if more BAYC deposited in, the APY of BAYC will decrease, the market will find a balance in the end. Anyway, even the TVL is up to 20M, the APY will be around 5%~19%, which seems to be attractive.

2 Likes
#9

Maybe we can also use all the incentives that we have for NFT.
Only by attracting more NFTs can we get a significant boost in APECoin APY.
Compared to the boost in APECoin APY from NFT+APECoin paired staking, the APY from direct Bend rewards on APECoin is clearly not advantageous.
NFT rewards are calculated according to the number of paired APECoin.

Basic Data:

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a4c2ccd767d1e9867fd8f40ad78b871803×146 6.04 KB

APY:
dfefa9d3cf97c0b260d2587203f6bad
dfefa9d3cf97c0b260d2587203f6bad803×157 5.83 KB

This option is not about giving up on incentivizing APECoin, but rather incentivizing NFT can generate more revenue for APECoin.

1 Like
#10

I agree with this, we need more NFT join in the pool staking, even though I’m also a big holder of apecoin.

2 Likes
#11

I am afraid that after v1 migration to v2 the apecoin will be short, and maybe after that we need to do more incentive for apecoin😂

#12

A supplementary idea: How about using VeBEND instead of BEND as the incentive token?

Consider the following:

  • Currently, the whole market is in bear market phase, and Bend Token price also didn’t perform well recently. Therefore, directly using BEND Token as the incentive would inevitably increase the selling pressure, further affecting the price of BEND.

  • VeBend provides both voting rights and protocol income sharing rights, and the APR consistently maintained at a high level in the last 1 year. See the current APR as follows:
    image

  • Therefore, using VeBEND instead of BEND Token as the incentive for ApeStaking V2 will not only reduce the selling pressure impact, but also provide higher returns for long-term supporters.

In terms of implementation:

  • The total amount, incentive period and other rules remain unchanged.
  • When user claim the incentives, the BEND token will automatically be locked as VeBend, with a default lock-up period like1 year (subject to community voting for final decision).
#13

I agree with Bend Incentives to attract new users with higher APY. The only issue is this can create sell pressure on Bend if they don’t see the utility for Bend. I think to combat that all VeBend holders should get a % of revenue from Ape Staking protocol whether that means splitting 4% with treasury or increasing that amount and a portion to VeBend holders. It adds another utility and creates buy pressure for Bend.

#14

Plan C

Background

The purpose of our token incentives is to attract more NFTs to BendDAO. Currently, BendDAO’s ApeStaking V2 offers the highest returns in the market. Based on Plan B’s calculations, the additional APR provided by Bend token incentives is insignificant and not enough to attract NFT holders to join BendDAO.

Motivation

Although ApeStaking V2 from BendDAO offers the highest APY in the market, there are still some NFTs that exist in other protocols. In order to attract these NFTs to BendDAO, it is suggested to provide gas fee subsidies for NFTs entering BendDAO, so that users can obtain the highest APY in the market without paying for migration costs.

Basic Information

Subsidized Token: BEND

Token Source: BendDAO Treasury

Subsidy Target: Users who have deposited NFT for more than 1 month on ApeStaking V2 (including migrated users).

Subsidy Method: Calculate the gas fee at the time of migration or deposit (including gas fee transferred from other platforms) and distribute the equivalent value of BEND tokens.

4 Likes
#15

Although I don’t want $bend to continue to inflate, but I can only support it with tears for the sake of the event. I hope the benddao team can spend more energy to control the total amount of tokens, such as destroying some, so that the price of the currency will not keep pouring down,thx