What to do with the protocol profit/earning/fees generated (0x859eefc267671595d987d0f6589d7771d4877113) to:
- Increase the governing power of COVER tokens
- Secure fund for future development?
COVER is a valueless-but-powerful governance token of a protocol that completing the open-finance puzzle: Unstoppable coverage, protecting participants against unexpected incidents. While waiting for further core releases (v1.1 by Andre Cronje in audit, v2 expected by Q1 2021 with audit cost estimated >40k $), COVER holders can align the supply-demand of the governance token, incentivising positive constructing ideas and accumulating fund for sustainable development. The result of this proposal can be revisited whenever major changes affect the protocol or its governance holders. Please further understand the COVER protocol by reading official documents or important summary such as https://medium.com/iearn/understanding-cover-protocol-8b12745137b1
With the current inflation rate from Shield Mining (please refer to https://docs.coverprotocol.com/product/tokenomics), true supporters and magic-making people of the protocol may have their governing power diluted by yield farmers, speculative traders etc. To mitigate this and incentivise active improvement contributions, profit earned from the protocol fees can be used for tweaking the market supply-demand.
Current ideas and options are (feel free to propose better ones or modifications):
BUY BACK AND LOCK
Use profit to unexpectedly buy back COVER from the open market, take them out of the circulating supply and lock in a community-multisig wallet, community decides what to do in the future when necessary
BUY BACK AND REDUCE-POWER-GAP
Use profit to unexpectedly buy back COVER, INVERSELY reward them to holders who lock their COVER for a specific time (the LESS you own & the LONGER time you lock, the MORE token you get; and vice versa)
BUY BACK AND BURN
Use profit to unexpectedly buy back COVER, burn them, permanently reduce the total supply, but sparing no capital for future needs
BUY BACK AND LEND OUT
Use profit to unexpectedly buyback COVER token, deposit bought-back token as collateral & earn interest by lending on C.R.E.A.M. or BentoBox (Sushi)
BUY OTHER ASSET(S) AND REWARD HOLDERS (DIVIDEND-LIKE)
Use profit to buy another asset (ETH, BTC DAI etc.) and reward it to active COVER holders
If you don’t have anything to add/modify to the above options, just like the post. In a few days the finalized proposal will be out and official vote is on snapshot page using your Cover-holding wallet signature.
Welcome to discuss here or on Discord governance channel