Hello Liquid Governors!
It’s almost time to get into the internal Folks Finance vote for Period 8. Those who minted gALGO back in July will have the chance to make their voice heard on important matters regarding the future trajectory of Folks.
There are a number of proposals which the Folks team would like to request feedback on. Proposals which gather community support will be pushed into the vote, so if it’s important to you, drop a comment and start a discussion!
Listed below are the matters at hand:
1)COOP listing on Folks Finance
COOP INTRO: Popular community token COOP has become the darling of the Algorand community since its creation in early 2023. With 100% of the token being distributed to community members in the first few weeks of its existence, COOP is one of the most decentralized and democratized coins in the Algorand ecosystem. The Algorand community has shown great interest in a possible listing in the Folks Finance’s lending market. This measure proposes that COOP become available to deposit for earning interest and to borrow for exposure in Folks Finance’s markets. The asset cannot be used as collateral. Below its parameters
Parameters | Value |
---|---|
Collateral Factor | 0% |
Borrow Factor | 120% |
Liquidation Max | 50% |
Liquidation Bonus | - |
Liquidation Fee | - |
Collateral Cap ($) | - |
Variable Base Rate (RV0) | 0% |
Variable Slope 1 Rate (RV1) | 8.50% |
Variable Slope 2 Rate (RV2) | 200% |
Stable Additional Base Rate (RS0) | 1% |
Stable Slope 1 Rate (RS1) | 2% |
Stable Slope 2 Rate (RS2) | 200% |
Stable Excess Rate (RS3) | 40% |
Optimal Utilisation Ratio (Uopt) | 55% |
Optimal Stable to Total Debt Ratio (Oratio) | 20% |
Rebalance Up Utilisation Ratio (URU) | 85% |
Rebalance Up Deposit Interest Rate Percentage (DIRRU) | 48% |
Rebalance Down Delta (RD) | 20% |
Retention Rate (RR) | 10% |
Flash Loan Fee | 0.10% |
Borrow Cap ($) | 30.000 |
Single Stable Borrow Percentage Cap | 6.50% |
If the proposal is put to a vote, the options would be:
a) Approve listing COOP in the Folks Finance Markets.
b) Deny listing COOP in the Folks Finance Markets.
2)Diversifying the Folks Finance Community Treasury
The slump in the crypto market over the past 18 months has reminded everyone that diversifying holdings is key to managing risk and minimizing value depreciation. Here ASA Stats you can see how the treasury is composed . Folks’ Community Treasury is worth over 100,000 USD, with sizable holdings in gALGO. The Folks Economic team proposes introducing a structured diversifying strategy in order to increase the Community Treasury’s stablecoin share. Details on this strategy can be found below:
Summary
To secure the long-term financial health of our protocol and mitigate market risks, this proposal outlines a structured asset liquidation strategy. The current share of stablecoins within the treasury represents 26.35%; the goal is to attain a 50% cash share in the form of stablecoins. The liquidation will follow a Dollar-Cost Averaging (DCA) approach, which is designed to reduce the impact of volatility. The assets will be converted into a basket of stablecoins like USDC and USDT to maintain a diversified cash position.
Time Interval for DCA
After evaluating market liquidity, volatility, and our treasury’s asset size, we propose to proceed with bi-weekly intervals for the asset liquidation. Bi-weekly intervals strike a balance between reducing market impact and completing the liquidation within a reasonable timeframe.
Execution Plan
Phase 1: Liquidate 10% of assets in the first 4 bi-weekly cycles (8 weekss).
Phase 2: Once the 40% stablecoins share is reached. Liquidate 5% bi-weekly to reach the new stablecoins share allocation.
Phase 3: Keeping the shares rebalanced on a bi-weekly basis
Phase 4: Re-assess the strategy after two months to adapt to any major market changes.
If the proposal is put to a vote, the options would be:
a) Approve the diversification strategy outlined in the proposal.
b) Deny the diversification strategy outlined in the proposal.
3)Liquid Governance Sustainability Fee
Liquid Governance is the most popular DeFi solution to Algorand Governance, with over 460 Million gALGO minted by 3,665 Governors during Governance Period 8. With the goal of becoming a sustainable protocol on the way to decentralization, a sustainability fee could be introduced to Liquid Governance. We’ve seen many projects forced to sunset without methods of generating revenue for the business. This fee would support the long-term goal of Folks Finance to be independently healthy and self-sustaining. This fee would equate to 0.4% of the gALGO minted amount. All collected fees will be allocated to the Community Treasury, and if any funds are needed for development costs, a forum discussion will be created.
If the proposal is put to a vote, the options would be:
a) Approve implementation of Liquid Governance Sustainability Fee.
b) Deny implementation of Liquid Governance Sustainability Fee.
4)Governance Revenue Distribution
Folks Finance has generated a minimum of 954,325 ALGO from Liquid Governance during Period 8. The proposed allocation of this revenue is as follows:
- Community Treasury: 150,000 ALGO
- Partners and Ecosystem Adoption: 150,000 ALGO
- Business Development: 754,325 ALGO minimum (amount is likely to increase with APR as Gov8 continues).
Business Development Funding includes the cost of Audits, marketing, and the Folks Finance Bounty for the Algorand Hackathon.
If the proposal is put to a vote, the options would be:
a) Approve the revenue allocation detailed above.
b) Deny the revenue allocation detailed above.
5)Folks Finance Technical Explanation Video
Videos are a powerful educational tool. The Folks Team would like to know if the community is interested in an animated educational video which explains some of the technical aspects of the protocol.
If the proposal is put to a vote, the options would be:
a) Approve allocation of $3000 from gALGO Business Development to support the creation of this video.
b) Deny allocation of $3000 from gALGO Business Development to support the creation of this video.
6)Distribute Targeted Rewards as gALGO
The Algorand Foundation distributes ALGO as Targeted Rewards to DeFi projects, of which Folks Finance is one of many. Folks would like to distribute these rewards as gALGO, which would require the rewards to be committed to Liquid Governance. This is only possible if the rewards are distributed before the commitment window closes. The revenue generated from gALGO would be distributed in the following quarter in accordance to the guidelines of Targeted Rewards Distribution.
If the proposal is put to a vote, the options would be:
a) Approve conversion of ALGO Targeted Rewards into gALGO.
b) Deny conversion of ALGO Targeted Rewards into gALGO
The Folks Team would like to extend our gratitude to the community. The continued support and engagement is greatly appreciated and gives reason to keep building and expanding Folks Finance.
Please leave your thoughts on the proposals below, and invite your friends to join in the conversation as well.