[PIP #12] - Allocating 50% of vePENDLE Voter Rewards for mPENDLE/PENDLE Liquidity

Abstract

This proposal seeks to allocate 50% of the vePENDLE voter rewards towards buying back PENDLE and supplying it as liquidity for the mPENDLE/PENDLE pair, rather than buying back and burning mPENDLE. This change aims to support the peg and simultaneously build up protocol-owned mPENDLE/PENDLE liquidity, providing long-term stability and growth for the ecosystem.

Motivation

Supporting the mPENDLE/PENDLE peg is crucial for maintaining the stability and usability of mPENDLE within our ecosystem. By allocating 50% of the vePENDLE voter rewards towards buying back PENDLE and supplying it as liquidity for the mPENDLE/PENDLE pair, we aim to:

  • Strengthen the peg between mPENDLE and PENDLE.

  • Build up protocol-owned liquidity, enhancing the overall liquidity and stability of the pair.

  • Generate staking rewards from the mPENDLE/PENDLE LP, which will be compounded back into the LP, providing continuous support and growth.

This strategic move aligns with Penpie’s commitment to long-term stability and growth, ensuring that our reward systems and liquidity mechanisms support our operational objectives.

Specification

Upon receiving wETH vePENDLE voter rewards at the end of each month, we will allocate 50% of these rewards to buy back PENDLE over the following month. The acquired PENDLE will then be supplied as liquidity for the mPENDLE/PENDLE pair. The staking rewards generated from this liquidity provision will be compounded back into the mPENDLE/PENDLE LP.

We ask vlPNP holders to vote on whether to approve this allocation of 50% of vePENDLE voter rewards towards buying back PENDLE and supplying it as liquidity for the mPENDLE/PENDLE pair.