LayerZero RFP Proposal

1

Hello,

Recently there have been discussions on LayerZero governance to reward protocols. Typically, LayerZero asked every team which built on top of LayerZero to submit a RFP to specify how they should reward their stakeholders retroactively for the LayerZero integration.

Here is a proposition of what we could post for the Angle Protocol which built around LayerZero since the very early days :point_down:

[Angle Protocol] RFP

Introduction

Project Name: Angle Protocol
Project use-case: Angle is a decentralized stablecoin protocol, behind two stablecoins, EURA and USDA.
These stablecoins are crosschain stablecoins available on >10 chains thanks to LayerZero message passing infrastructure.

Purpose of Distribution

Distribution plan for Angle token allocation:

  • 10% to the developers who built and deployed the smart contracts that were then used by the DAO to enable people to bridge Angle stablecoins across different chains, and which developed the frontend interface for this
  • 90% to token holders: precisely speaking, 90% to veANGLE and sdANGLE holders based on the evolution of their balances between July 2022 to the date of LayerZero Snapshot on the 1st of May 2024. To build the CSV, we looked in the time-weighted respective balance of veANGLE and staked sdANGLE holders over the whole time duration, with a 2x boost given to the StakeDAO treasury sdANGLE treasury address.

Justification for our distribution plan:

Angle is a decentralized protocol governed by veANGLE holders (ANGLE token holders which lock their tokens). These holders vote on all the decisions related to the protocol, whether it is onboarding of new collateral assets, new chain deployments, choice on technical infrastructure or anything of the sort.
They are typically the ones which voted to onboard LayerZero as an interoperability solution for EURA back in July 2022 and who voted the same for USDA in April 2024.

While there are many stakeholders contributing or involved in the protocol, veANGLE holders are the ones which make most sense to retroactively reward for their contributions.

First, not only are they the decision makers of the protocol, but they are the users most aligned with Angle Protocol success and the success of all the protocols on top of which Angle is building. By granting tokens to veANGLE holders, Angle governance and LayerZero governance will become de facto linked to one another for the best interest of both projects.

veANGLE holders are also the ultimate backstop in the protocol. If something went wrong in the protocol and leftover funds had to be forwarded to protocol stakeholders, they’ll be the last recipients of the waterfall, potentially getting nothing. veANGLE holders have already faced in the past the downsides of the composability of the protocol sometimes relying on infrastructure from other systems (cf Euler hack), as the stakeholders most incentivized on the long term success of the protocol, they should also be exposed to the upsides that this composability brings when integrations work out really well, like it’s the case with LayerZero.

The other stakeholders which could have made sense are EURA holders that bridged their tokens using LayerZero. Very often, when doing so, these took part in the yield opportunities that were offered by the protocol on other chains and got sometimes ANGLE tokens or other forms of incentives, so they’ve already been rewarded in a way. To some extent, with the ANGLE received, their interest are already well aligned with that of the protocol. It’s interesting to note that most EURA large stakeholders are also among the large veANGLE holders of the protocol.
Also, the non-sybil bridgers may also be directly rewarded by a direct LayerZero airdrop.

In the computation of the time-weighted balance of users veANGLE and staked sdANGLE address, we added a 2x boost for StakeDAO Treasury address. The rationale for this boost is that, while StakeDAO didn’t partake directly in the development of the Angle infrastructure around LayerZero, they’ve been important governance infrastructure providers during this whole time period for the protocol and as the sense of the proposal is to reward governance, it makes sense to boost those who made it possible for people to participate in this governance.

CSV

The CSV file here provides the result of the computation. Next to each address is the proportion of the Angle RFP that each address should receive in base 18.

Typically:

0x529619a10129396a2F642cae32099C1eA7FA2834: 100007231247425660

Means that this address (which is by the way Angle Labs developers address on Ethereum) should receive 0.1 = 10% of the total allocation meant for Angle Protocol.

2 Likes
2

I think this is a well thought out and balanced approach to rewarding Angle stakeholders. No argument from me.

3

Thank you for the proposal and the computation of the CSV.

Interesting proposal and easy to implement as veAngle holders and sdAngle stakers are quite easy to track (compared to EURA/USDA holders that can be in any layer 2 and any LP :slight_smile: )

I hope most of Angle labs devs are also veAngle holders !

Maybe a link to the script that creates the CSV the file could help some curious people :slight_smile:

4

Fully support. It totally make sense to reward veANGLE who sustain ANGLE liquidity for years and help protocol grow in many ways.

5

For the script, we used the Merkl engine to run this, so unfortunately we cannot share it immediately

6

I think this is good but the split of the Stake DAO Angle locker’s share between sdANGLE holders should be based on the Working Balance share of the sdANGLE gauge.

Would be great also to make the script public so we can check it.

7

Ok, I see you can’t share the full calculation, but can you publish the csv with the info presented like that please?

Address // Proportion from veANGLE // Proportion from sdANGLE // Total Proportion

This would really help checking the figures.
Thanks a lot in advance.

8

This distribution plan is extremely unfair. Please refer to LayerZero’s distribution recommendations on Commonwealth:

Projects are encouraged to reward activities that best support their application. For example, distribution for a project’s allocation might look something like this:

  • 50% to users who bridged an OFT
  • 20% to LPs
  • 15% to token holders
  • 15% to community members

Link to Commonwealth discussion：(https://commonwealth.im/layerzero/discussion/17246-protocol-rfp)

I hope the Angle team carefully considers allocating a portion to users who bridged an OFT. This is not only for fairness but also for the development and reputation of Angle.

1 Like
9

We’ve posted the breakdown in the spreadsheet

1 Like
10

I appreciate your response, but I’d like to address two points for further consideration.

First, the concept of “fair” distribution can be subjective. Perhaps we could discuss your perspective on what a fair allocation of LZ tokens might look like in this situation. It’s important to remember that the Angle team’s primary goal in implementing LZ technology was to provide our users with an innovative and advanced bridge solution, not to incentivize airdrop hunters. No one promised rewards for using LZ through Angle frontend. So boasting to say the distribution “unfair” seems unreasonable and unconvincing.

Second, the proposed LZ distribution model is a recommendation, not a mandate. Protocols have the autonomy to decide how to allocate the provided LZ tokens based on their own terms and best interests.
After all, LZ RFP allocations are meant to reward developers who took the risk of integrating LZ technology into their platforms when it’s in the experimental phase.

Good day!

11

LayerZero has already provided a distribution suggestion on the Commonwealth, but you still insist on distributing 90% to Angle holders, emphasizing that the concept of “fair” is subjective. Do you think such a distribution is fair? If you believe the primary goal is to reward developers, then why did LayerZero give a distribution suggestion? And why did LayerZero suggest giving 50% to users?

This reminds me of a story: A generous professor saw a student who wanted to research his area of expertise and decided to provide a grant to this student. The professor suggested that the student use the money to do something beneficial for his research direction, recommending using 50% of the money for research and the rest for personal expenses. However, the student used all the grant money for personal expenses, such as buying a car or entertainment.

Do you think this story is similar to your explanation? Or do you believe that receiving ZRO tokens from LayerZero is something you deserve, which is why you consider your distribution to be fair?

1 Like
12

Many Angle holders may not have used LayerZero’s protocol or even be aware of LayerZero’s existence, yet the Angle team believes Angle holders are very important and have made significant contributions to Angle. Therefore, choosing to allocate the majority of ZRO tokens to Angle holders is reasonable. However, your decision to disregard LayerZero’s suggestion and allocate all of the ZRO tokens to Angle holders, with none allocated to users , is not fair in my opinion, as these users have contributed to both Angle and LayerZero.

13

Finally, if an application of a technology is implemented in your project, and the main users come from this technology rather than the investors and team of your project, then you should contemplate why all rewards are being allocated to investors and the team. If there are no users from this technology, then this technology has no significance in your application.

14

The Angle team developed the Angle bridge using LayerZero technology primarily to facilitate EURA interoperability. Airdrop farming wasn’t our initial goal, and it doesn’t contribute directly to Angle’s growth.

While veANGLE holders play a crucial role in Angle’s success. By locking their tokens, they take on significant risk to ensure long-term EURA liquidity through emissions which allows users to exchange EURA with minimal slippage.
Therefore, I believe veANGLE holders, who helped Angle protocol survive through the bear cycle without native yield since the Euler incident, deserve to benefit from the LZ token allocation. This will incentivize continued participation and contribute to Angle’s sustainable growth in the future.

15

.users get nothing, Just holders?

bruh

16

I used Angle several times to perform Bridges involving chains not covered by other similar protocols. This RFP will only be possible by users like me, and this use was only possible thanks to LayerZero technology, which clearly recommended that there be a return for users of its bridges. All protocols are discussing proposals on these bases. Giving returns exclusively to veToken holders is disrespectful to the entire community that used the project. I sincerely hope you review this extremely unfair allocation.