Prime Tokenomics: V2 Migration and Retrospective Rewards

This is a draft proposal - we are actively looking for feedback from the community!

Background & Motivation
In PDP8 PrimeDAO Governance voted to start the transition towards a PrimeDAO V2 with a new Prime Token. This kicked off the Prime Seed round which has been concluded recently. As the Prime V2 Token launch is coming closer (expected to take place in the next 8 weeks) - it is time to align on the smaller details of the Prime token distribution.

This proposal aims to formalize the specific rewards for the V1 Prime Contributors. According to PDP8 - up to 5% of the Prime V2 tokens will be distributed to the V1 Prime Contributors with an anticipated vesting schedule of 3 months following a 3-month lock-up.

The Prime Migration squad has worked out an initial proposal for the specific details for these retroactive rewards. The intention is to distribute a total of 4M PRIME V2 tokens based on retro-active rewards and 1M PRIME tokens for liquidity rewards directly following the PRIME Liquid Launch.

Distribution Logic
We propose allocating PRIME V2 based on two snapshots. The first snapshot has been taken today, on October 7th, and will be utilized to reward early users for their engagement with our contracts/ services. A second snapshot will be taken 24 hours before the PRIME Liquid Launch to reward Prime V1 holders.

Please view the Prime V2 Token Draft Sheet here!

First snapshot - taken today on October 7th, 2021
For the retrospective rewards, we have taken a snapshot on October 7th, 2022 of the user engagement with our contracts. We have identified 9 engagement indicators each with their own respective weight of PRIME allocated to the indicator for a total amount of 1,420,000 PRIME tokens to be allocated as early rewards. Each engagement indicator in turn has a predetermined allocation and within each indicator rewards are allocated relative to the individual contribution (e.g. a user that provided twice as much liquidity in a LP pool as another user will receive twice as much v2 rewards). The activity indicators and their associated v2 allocations can be found in the following table:

Engagement Indicator Description Absolute Allocation Relative Allocation*
Early contribution rewards Contributed to Prime Development Cycles 300,000.00 21.13%
reputation Earned REP xDAI PrimeDAO 130,000.00 9.15%
LP BlxPr Provided Liquidity to BLxPR 130,000.00 9.15%
LP BPrime Provided Liquidity to BPrime 260,000.00 18.31%
Farm 1 Participated in Farm 1 120,000.00 8.45%
Farm 2 Participated in Farm 2 80,000.00 5.63%
Farm 3 Participated in Farm 3 80,000.00 5.63%
IDO Participated in Mesa Raise 100,000.00 7.04%
Lock for Rep Participated in Lock for REP 70,000.00 4.93%
Swapping Used the Swap function of Prime Router 50,000.00 3.52%
Hodlers IDO till now Participated in Mesa Raise and still holds 100,000.00 7.04%

Second snapshot - to be taken 24 hrs before the Liquid Launch
In the second snapshot, we capture the balances of all PRIME v1 tokens that are in circulation. Thereby any PRIME v1 tokens that are staked in any of our contracts are taken into account. We refer to this as the adjusted v1 balances (e.g. a user who holds 100 PRIME and who has staked another 30 PRIME for Reputation has an adjusted v1 balance of 130 PRIME). Users receive v2 tokens for their adjusted v1 balances in a 1:1 relationship (e.g. the user from the previous example would receive 130 v2 tokens). The following staking contracts are taken into account to calculate the adjusted v1 balances:

  1. Providing liquidity to BlxPr Pool
  2. Providing liquidity to BPrime Pool
  3. Staking PRIME for Reputation
  4. Staking LP tokens in any of our three farms

The exact total amount of adjusted v1 tokens will be determined at snapshot time, but is projected to be around 2,580,000.

Dealing with contract addresses
Based on the user engagement indicators there are about 700 addresses eligible to claim v2 tokens. Around 100 of these addresses belong to contracts. We want to avoid sending v2 tokens to contract addresses that are unable to move tokens (because they lack this functionality). The contract addresses of the dataset can be divided into three groups. These groups are explained in the following and how we intend to proceed with each:

  1. Gnosis Safe contracts will be treated just like regular addresses

  2. Identified contracts that might be unable to move tokens, but that can be associated with an owner address (DSProxy, FlashWallet). We use the owner addresses as recipients for the rewards.

  3. Identified contracts that should not receive rewards, e.g. DEXs (UniSwap), aggregators (Atomic Blue), are excluded from any rewards.

Reward methods
Based on the current Prime V2 Token Draft we anticipate approximately 700 addresses to be eligible for early Prime Rewards. The migration group has worked out two methods for distributing PRime V2 rewards that optimize for user experience and overhead for PrimeDAO.

  1. For addresses that are eligible to under 1000 PRIME tokens (~500 addresses), we suggest sending it through a multi send function 3 months after the Liquid Launch.
  2. For addresses that are eligible to over 1000 PRIME tokens, we suggest deploying Sablier streams at the 3-month mark that take another 3 months to fully un-vest.