[RFC] Explore synergies between the Vesta Finance and Liquity communities

General Protocol
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Context

As a Liquity fork, the Vesta team contacted the Liquity founding team early on and discussed opportunities to work together.

There were discussions of allocating between 2 to 4% of the total token supply of VSTA to the Liquity Community and/or Treasury. This was specified in a document created on Dec 22, 2021, that the Vesta Team shared with the Liquity A.G. Team.

Objectives

This RFC is essentially an olive branch, a peace offering. So far, the Vesta team failed to honor its initial commitment. Several community members have tried to raise awareness of this situation to the Vesta team, with no success.

Yet, I am convinced it is not too late to make it right!

Proposal Details

There could be various areas of collaboration, but one the Liquity community would be particularly interested in is the Arbitrum network. Indeed, LUSD’s presence has been growing on the network, with strong liquidity, a ChainLink LUSD USD price feed and an Aave listing voted in and to be implemented shortly, paving the path for further integrations.

However, due to the questionable Arbitrum allocation logic, the Liquity Treasury received 75K ARB tokens (vs 2.7M for Vesta), which hinders LUSD’s ability to grow its footprint on the network. Vesta could already have a significant positive impact for LUSD on Arbitrum using a reasonable allocation share to support joint incentives - such as 10% of the tokens received (~270K ARB).

Joint Efforts on Arbitrum

One of the paths to resolving this could be to redistribute a share of the ARB allocation Vesta Finance received to either the Liquity community/treasury or even deploy it as incentives on LUSD/VST pairs, for instance (yes, LUSD is on Arbitrum, with about 4M LUSD there)

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Several Liquity community members with sizeable veRAM, veCHR, and xGRAIL positions are happy to support LUSD-related pairs.

VSTA allocation to Liquity user

On top of joint liquidity efforts, it’s a common and good practice for a fork to acknowledge its provenance with governance tokens allocated to the users of the mother protocol.

Other areas?

The two paths above are merely suggestions; I’d like to hear what the Vesta community thinks is the best path forward.

Further Thinking Considerations

With the multiplication of Liquity forks lately, a structure is being set to support liquidity on LUSD/LUSD_forks pairs. This structure will work exclusively with Liquity-friendly forks, so I believe it can truly be in the interest of both parties to attempt to resolve this situation.

Note: This is an early RFC with no specifications to start the discussion. Once a community consensus emerges, I’d happily specify this proposal further. Looking forward to hearing your input!

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Hey Brice! Welcome to Vesta’s governance forum, it’s good to see you here.

I vividly remember the team allocating some VSTA for LQTY stakers and I hope the team honors their original commitment. I know I’m not alone in believing that forks should pay their respects to their mother protocol.

I also wholeheartedly agree with forming a partnership. It will mutually benefit both protocols and help lend Vesta some legitimacy to help garner increased trust from the community.

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I would like to support this idea. I remember as well that initially there was talk of airdropping certain share to Liquity and their holders.

It seems correct to honor what was said, and specifically to give back to the original protocol whose fork we are using.

For what regards ARB allocation, I must disagree as Vesta was rewarded as one of native Arbitrum protocols that offered Arbitrum integrations. This allocation is reward for Vesta contribution to Arbitrum and it should be used to further expand Vesta itself.

Shared liquidity incentives can and should be explored as those could be to a mutual benefit. Here we could explore using ARB allocation if it is matched by Liquity with their own incentives.

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Thanks for the support. To be more explicit regarding the allocation attribution, the ARB, suggested it as a gesture to appease further the situation - a gesture the Liquity community will surely appreciate.

Indeed, Vesta received 36x the Liquity allocation, despite having barely twice the supply that LUSD has on Arbitrum. It’s not Vesta’s doings, but the Arbitrum Foundation that did not think the metrics chosen carefully, but I believe it would be a nice gesture to at least commit some of these ARB tokens for incentivizing a LUSD/VST pool.

Since the Vesta team literally rugged on its airdrop promise (so far, not too late to make it right!) and even removed any mention of it from the documentation, there is a decent amount of skepticism in the Liquity community… I am sure you will understand why that might lead some community members to prefer receiving ARB tokens instead of VSTA.

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I agree and also believe that the best solution would be to use some of the 2.7M Arb to incentivize a LUSD-VST LP.

Nonetheless, I wish you luck… Vesta received its allocation months ago and nothing has happened. The last proposal suggested to use some VSTA to incentivize a pool on Wombat, so good luck to you!

Personally still wondering how many people “work” at Vesta and what they actually do. The only words I see the team use on their twitter are either “soon” or “we’re rethinking”. Quite sad.

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Hi @TokenBrice thanks for visiting our governance forum and for posting this initiative. The original intention of paying homage to Liquity is not forgotten. However the structure that we are building is not one that you suggested - the structure we are setting up will look similar to one that require LQTY stakers to open positions on our v2 protocol to receive rewards in VSTA.

As for the ARB tokens, we are planning to keep it in the short term for governance purpose. IMO it’s not quite a optimal strategy to give away the gov token of one of the best L2s during the depth of a bear market.

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Helllo @mikey, and thanks for answering.

The envisioned solution sounds more like a vampire attack than a way to give back.

Thanks for the clarification regarding the ARB tokens - I figured that since Vesta allocation is 35x the one of Liquity, there could be ways to collaborate and give back on this level without hindering the growth of Vesta.

It seems like the community to has given up on any hope of seeing this situation resolve in an acceptable and friendly manner - and I’d agree: the first wave of answers received are showing that the team seems not bothered to have not delivered yet on its promise, and looking for all the ways to modulate it resulting in the least effort for Vesta and maximal benefits: this is not how you give back.

As said in the introduction, we working on a framework to structure the contribution and collaboration between the Liquity community and the forks, but it’s not defensible for us to support non-friendly forks. I hope the Vesta Team will eventually align on the view shared by both the Liquity and Vesta communities: the Vesta team failed on its initial promise and should resolve the tension ASAP. When an olive branch is extended, you should seize it rather than discuss the color or nature of the branch, so let me reiterate the main ask:

Vesta could already have a significant positive impact for LUSD on Arbitrum using a reasonable allocation share to support joint incentives - such as 10% of the tokens received (~270K ARB).

This means 10% of all Vesta ARB tokens allocated over time, to grow liquidity on VST/LUSD pairs. This endeavor benefits Vesta as much as Liquity, while finally mending the relationship.

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Hey @TokenBrice,
with your current stance & postulations, I don’t think you’re gonna make any friends amongst vestafinance. You’re talking about “peace offering”, “not too late to make this right”, “seeing this situation resolve in an acceptable and friendly manner”. This seems far too much like a veiled threat, please tell me it is not. If it is, please wake up, you’re making a clown of yourself.
There is no reason whatsoever for vesta to give any $ARB to Liquity. They have been airdropped this token to help build out the arbitrum ecosystem, not to pay it as protection money to the first protocol that comes knocking. If Liquity can not manage to expand without needing to be pumped full of $ARB, there might just be no place for LQTY on Arbitrum.
No one cares about a LUSD/VST pair. Yes, one problem VST currently has is indeed low liquidity, but pairing it with a token which has even lower liquidity is not gonna help in any way to mitigate that problem.
As @mikey has explained, they are working on providing value to LQTY holders who are using the protocol, which is considerate and more than amiable. Therefore, I as a community member fully support the team in their decision.
And let’s set this straight; You’re not the one extending the olive branch. You’re a grifter.

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Hello @Pater-Bogdanoff, thanks for this very aggressive first-time-ever contribution to the forum.

You seem to bear the name as aptfully as the Bogdanoff brothers themselves; calling me a grifter is beyond stupid and shows how little idea of the context you have.

The grifters here is the Vesta team, which failed to deliver on formalized promises and then resort to various tactics when confronted about it.

Here’s a snippet that should refresh some memories - you can also check for a previous version of the Vesta documentation on the Internet Archive to find now-removed mentions of the same airdrop.

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It seems like there is little interest to even try beyond this point, but at least now the Liquity community knows precisely where to stand regarding Vesta and the promised airdrop. Have fun!

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Someone seems to like drafts and grifts. :open_mouth:

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:clown_face: :see_no_evil: :man_shrugging:

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Hey Mikey, please excuse Brice. I think he’s just expressing the community’s frustration.
I really do want Vesta and Liquity on the best of terms and will help facilitate that outcome any way I can.

With Vesta V2 supporting vested VSTA, a veVSTA airdrop could be a good way for Vesta to fulfill its airdrop promise to Liquity.

As for the partnership, I believe the best path is to jointly incentivize a VST/LUSD pair on a ve(3,3) dex where Liquity will use its community voting power and Vesta will use some ARB. If we look at the Chronos LUSD/USDT pool as an example, that pool has roughly $850K TVL and is yielding LPs ~2.5-5% APR based on the maturity of their LP positions. Yesterday it was incentivized with just 500 ARB. That’s quite capital efficient and we could do the same with any ve(3,3) dex for a $500K VST/LUSD pool. My rough calculations show that incentivizing a $500K pool yielding LPs ~8% costs roughly 470 ARB per week.

Right now Ramses and Chronos are the premier Arbitrum Dexs, Vesta can decide which one to use or another I didn’t mention. An another opportunity for Vesta is to grow some protocol owned liquidity (POL) on one of these dexs to acquire their governance token and perpetually incentivize Vesta pools.

Please let me know if you have any concerns that I can address.