Motivation
We’ve recently announced $DG, the decentral.games governance token, which governs the decentral.games treasury (house funds) that accrue from game profits. 62% of the total supply will be distributed to the community via gameplay mining, liquidity farming, and governance rewards over 6 years:
Gameplay mining rewards players with $DG for playing games with MANA and DAI. This play-to-earn dynamic directly incentivizes users to purchase MANA, log into Decentraland, and play games. Additional mining bonuses are given to players playing at the same time and players wearing Decentral Games wearables.
Liquidity farming rewards liquidity providers with $DG for providing liquidity in MANA-DG and DAI-DG AMM balancer pools to ensure a healthy ecosystem. We felt it would be beneficial to the Decentraland DAO to provide some liquidity in the MANA-DG 98/2 balancer pool because the DAO will receive $DG. This not only monetizes the dormant MANA the DAO holds, but also gives the DAO upside on the success of the decentral.games ecosystem.
For more details on the $DG token distribution view our docs.
Concrete Proposal
We propose that the Decentraland community allocates some MANA from the Decentraland DAO treasury to farm $DG in the MANA-DG 98/2 balancer pool. It is very low risk as the liquidity in the pool would be 98% MANA and 2% DG, and the DAO will receive $DG token
Since 9% of the token $DG token supply is allocated for liquidity farming, and it is split equally between the two pools, this means that 4.5% of the token $DG supply [45,000 $DG] will be distributed to $MANA liquidity farmers.
Background
Recently, DeFi has championed new token models built with liquidity farming and play to earn incentive mechanisms. These new models revolve around the concept of monetizing dormant capital, and Decentraland has a lot of MANA that isn’t producing any return for the community.
Farming $DG is a direct way to monetize the dormant MANA sitting in the Decentraland DAO treasury with very minimal risk, while accruing $DG governance tokens that hold voting power to shape the future of the decentral.games ecosystem and manage the decentral.games treasury.
Balancer pools: https://pools.balancer.exchange/#/explore?token=0xEE06A81a695750E71a662B51066F2c74CF4478a0&filter=1