Proposal: Pause KEEP Inflation To Calculate Token Factor for Threshold

Intro

Keep inflation must be paused to determine the token factor for wrapping KEEP to T. Currently, Keep inflation occurs as a result of distributing network incentives.

This proposal, when confirmed, will stop reward distribution beyond what we have allocated in previous proposals and this proposal together. If passed, the proposal will set aside any KEEP remaining in allocation for future network incentives (at the moment around 73M KEEP) into a Threshold DAO owned contract to be deployed with the Threshold DAO. The Threshold DAO can then vote to ratify an official freeze of the new KEEP under ownership, or retain the power to unfreeze this KEEP in the future in case of an unforeseen emergency.

If this proposal is passed it will allow Threshold Network to calculate a token factor for KEEP token holders with which to merge networks at a 50-50 joint ownership.

Furthermore, since this proposal was already shared at multiple community calls without significant push back from the community and given the current merger timeline constraints it will reach a Keep Community Multisig Vote immediately.

Rewards to Pull Forward

ECDSA Staking

The Keep community voted to extend 3M KEEP in staking rewards through March 2022.

Furthermore, there are 1,391,442 KEEP in outstanding rewards for the interval of Nov. 26th through Dec. 3rd.

The total remaining to allocate in ECDSA staking rewards is 4,391,442 KEEP.

Liquidity

In addition, this proposal calls for an extension of current liquidity rewards through May 2022 to give the DAO time to set up systems and take ownership of liquidity rewards and to give the teams time to transition coverage pools from KEEP to T. Current weekly breakdown of KEEP liquidity rewards:

  • 170k KEEPs as an incentive for those who provide liquidity to the KEEP/ETH pool in Uniswap
  • 250k KEEPs as an incentive for the Saddle stableswap pool
  • 50k KEEP as an incentive for coverage pools

The weekly total is 470k and the monthly total is roughly 1.88M. There are 18 weeks until May 2022 which brings the total amount to 8,460,000. This includes the week of Dec. 26th 2021 in the pull forward amount.

V1 Random Beacon Stakers Bug Bounty

974,769 KEEP in total to distribute as a bug bounty for v1 random beacon stakers who have their rewards locked in the contract as a result of Nov 2021 unannounced Ethereum hard fork (https://github.com/keep-network/keep-core/blob/main/docs/status-reports/2020-11-11-retro-geth-hardfork.adoc).

Community Grants and Guild Rewards

We also need to pull forward outstanding Keep community grants and Threshold Guild rewards. I am proposing we pull forward Threshold Guild rewards until April 2022 to give the Threshold DAO time to set foundations and become operational. I am also proposing that we double the Threshold Marketing Guild budget and double the Integrations Guild budget to 10k KEEP per month for this time. This will further fund guild needs such as the Threshold USD Task Force and continue incentivizing community growth. The guild budget for December 2021 remains at 5k per guild.

  • 205K KEEP in community grants
  • 50K KEEP in Threshold Guild Rewards

Total Rewards to Pull Forward

4,391,442 KEEP ECDSA

8,460,000 KEEP Liquidity

974,769 KEEP Bug Bounties

255,000 KEEP Community Grants and Guild Rewards

14,081,211 total KEEP to pull forward.

Inflation Calculation

There is 73,134,981 KEEP currently remaining in the network incentives allocation.

73,134,981 KEEP - 14,040,211 KEEP = 59,053,770 KEEP to set aside

The total KEEP supply today is 999,848,780.80 KEEP.

999,848,780.80 KEEP - 59,053,770 KEEP = 940,795,010.80 KEEP total supply

940,795,010.80 KEEP total supply / 4,500,000,000 T supply reserved for KEEP = ~4.78 T per KEEP.

Thus, this proposal calls for the token factor for wrapping KEEP into T to be set at 4.78318863125502.

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