Merge pull request #227 from algorandfoundation/defi_rewards

arc-0048 Targeted Defi Rewards

ARCs/arc-0048.md

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+---
+arc: 48
+title: Targeted DeFi Rewards
+description: Targeted DeFi Rewards, Terms and Conditions
+author: Stéphane BARROSO (@SudoWeezy)
+discussions-to: https://github.com/algorandfoundation/ARCs/issues/227
+status: Living
+type: Informational
+created: 2023-07-19
+---
+
+## Abstract
+The Targeted DeFi Rewards is a temporary incentive program that distributes ALGO to be deployed in targeted activities to attract new DeFi users from within and outside the ecosystem. 
+The goal is to give DeFi projects more flexibility in how these rewards are structured and distributed among their user base, targeting rapid growth, deeper DEX liquidity, and incentives for users who come to Algorand in the middle of a governance period.
+
+## Specification
+The key words "**MUST**", "**MUST NOT**", "**REQUIRED**", "**SHALL**", "**SHALL NOT**", "**SHOULD**", "**SHOULD NOT**", "**RECOMMENDED**", "**MAY**", and "**OPTIONAL**" in this document are to be interpreted as described in <a href="https://www.ietf.org/rfc/rfc2119.txt">RFC-2119</a>.
+
+### Eligibility Criteria
+
+To be eligible to apply to this program, projects must abide by the <a href="https://www.algorand.foundation/disclaimers">Disclaimers</a> (in particular the “Excluded Jurisdictions” section) and be willing to enter into a binding contract in the form of the template provided by the Algorand Foundation.
+
+Projects must have at least 500K ALGO equivalent in TVL of white-listed assets, as calculated on June 23, 2023.
+
+The DeFi Advisory Committee will review applications to verify each TVL claim, thus ensuring that claims are valid prior to application approval.
+
+For AMMs we will leverage the Eligible Liquidity Pool list that is currently adopted to allow the governors commitment of LP tokens in the DeFi Rewards program, with extension to the assets defined below.
+
+For Lending/Borrowing protocols, each project will provide a list of their assets and their holding wallet address(es), which will be provided in advance for scrutiny.
+
+### Assets Selection
+
+The metrics used to select eligible assets to be used for Eligibility TVL Calculation (as per Eligibility Criteria above) were chosen to ensure that the selected tokens have a strong reputation, are difficult to manipulate, and are valuable to the ecosystem. This reputation is built on a combination of factors, including Total Value Locked (TVL), Market Cap, and listings. 
+
+>Assets are expected to meet at least two of the three criteria below to be included in the white-list.
+
+|Criteria||
+|:-|-:|
+|TVL|The total value locked in different Algorand protocols plays a key role. It's a good indicator of the token's popularity. Minimum TVL requirement: $100K across all the protocols.|
+|Market Cap|Market cap is a measure of a crypto token’s total circulating supply multiplied by its current market price. This parameter can be used to consider the positioning of the tokens on the entire crypto market. Minimum Market Cap requirement: USD 1MM.|
+|Listing|Tokens listed on multiple stable and respected exchanges are often seen as more established and trustworthy. This can also contribute to increased demand for the token and further the growth of its reputation within the ecosystem.|
+
+The following assets are qualified and meet the above criteria:
+- ALGO 
+- gALGO - ASA ID 793124631
+- USDC - ASA ID 31566704
+- USDT - ASA ID 312769
+- STBL2 - ASA ID 841126810
+- goBTC - ASA ID 386192725
+- goETH - ASA ID 386195940
+- PLANETS - ASA ID 27165954
+- GARD - ASA ID 684649988
+- OPUL - ASA ID 287867876
+- VESTIGE - ASA ID 700965019
+- CHIPS - ASA ID 388592191
+- DEFLY - ASA ID 470842789
+- BANK - ASA ID 900652777
+- goUSD - ASA 672913181
+- WBTC - ASA 1058926737
+- WETH - ASA 887406851
+- GOLD$ - ASA 246516580  
+- SILVER$ - ASA 246519683
+- PEPE - ASA 1096015467
+- COOP - ASA 796425061 
+
+> Applications for the above ASA white list for Governance Period 8 are now closed.  
+
+### Rewards Distribution
+
+Projects will receive 11250 ALGO for each 500K ALGO TVL as defined above, rounded down. In the event that 5MM ALGO are not sufficient for all the projects, ALGO rewards will be distributed to each protocol based on their weighted contribution of TVL to Algorand DeFi. 
+
+Rewards per project are capped at 25% of the total rewards distributed under this program for that period.  In the event of partial distribution of the allocated 7.5MM, the remaining funds will be distributed as regular DeFi governance rewards. For Governance Period 8, the AMM TVL count has doubled, when compared to lending/borrow and bridge projects, in recognition of their strategic role in providing liquidity for the ecosystem. This modification was approved by the DeFi Committee.
+
+Rewards under this program will be distributed to projects within 4 weeks of the scheduled start date of the new governance period and the project(s) must distribute the totality of the amount received as incentives to their users, with at least 95% of rewards distributed by the end of the period and the remainder distributed in the following period. The methodology for payment must be made public and approved by the Algorand DeFi advisory committee prior to distribution.
+
+
+## Rationale
+This document was versionned using google doc, it made more sense to move it on github.
+
+## Security Considerations
+Disclaimer: This document may be revised until the day before the voting session opens, as we are still collecting community feedback.
+
+## Copyright
+Copyright and related rights waived via <a href="https://creativecommons.org/publicdomain/zero/1.0/">CCO</a>.