PUP: Using PUZZLE tokens

Puzzle Usage Proposal

Hey guys!

It’s been two weeks since Power DAO received 16K PUZZLE tokens from the Puzzle team in exchange for XTN which are used to repay bad debt after the Puzzle Lend hack.

As for now, these PUZZLEs are kept in the DAO wallet instead of farming APY, which is pretty silly taking into account that there are a lot of options to use PUZZLE. With this Puzzle Usage Proposal (PUP) I propose to use these tokens in three different directions.

PUP-1. Stake 5,000 PUZZLE

That’s the simplest strategy to get some APY: PUZZLE staking doesn’t have any lockup and yields a native APY generated from swap fees. The rewards are paid in PUZZLE tokens and currently fluctuate in a range of 3-7% APY. Btw, the historical ATH of PUZZLE staking APY was more than 100% on the days of TSN launch.

You can read more about PUZZLE staking in Puzzle white paper.

PUP-2. Put liquidity in PUZZLE/XTN pool

Puzzle Swap is known for its megapools which generate native APY from fees to liquidity providers. I propose to use 5,000 PUZZLE and 450,000 XTN from the treasury to provide liquidity to one of these pools.

Right now, the major liquidity of Puzzle tokens is concentrated in PUZZLE/WAVES pairs on Waves.Exchange and Puzzle Swap. Creating the new big liquidity pool will be interesting for Power DAO to benefit from a big share of total PUZZLE trading volume, which is stimulated by regular token buybacks.

Usual APY in Puzzle Swap megapools is 10-20%. You can check more stats on the pools page.

PUP-3. Launch “early pools” with new tokens: WAKE, AXLY, etc

There are multiple projects funded by Power DAO which are going to launch their tokens in the near future. I propose to keep some PUZZLE tokens in the wallet and use them to launch megapools with the new assets. It’s well known that new tokens are actively traded, so it might be a good opportunity to launch liquidity pools as soon as those tokens go live to catch good rewards for LP.

Read more about megapool creation on Puzzle in the article.

Transactions

PUP-1. Stake Puzzle

{
“payment”: [
{
“amount”: 5000000000000,
“assetId”: “HEB8Qaw9xrWpWs8tHsiATYGBWDBtP2S7kcPALrMu43AS”
}
],
“call”: {
“function”: “stake”,
“args”:
},
“fee”: 500000,
“chainId”: 87,
“dApp”: “3PFTbywqxtFfukX3HyT881g4iW5K4QL3FAS”,
“feeAssetId”: null,
“initialFeeAssetId”: null,
“proofs”: ,
“senderPublicKey”: “GDPfYHA6NUZCmin3J7LWZhCvSjBcna8HebyvQyrw17v”,
“timestamp”: 1687112458,
“type”: 16,
“version”: 2
}

PUP-2. Put liquidity

{
“payment”: [
{
“amount”: 500000000000,
“assetId”: “HEB8Qaw9xrWpWs8tHsiATYGBWDBtP2S7kcPALrMu43AS”
},
{
“amount”: 450000000000,
“assetId”: “DG2xFkPdDwKUoBkzGAhQtLpSGzfXLiCYPEzeKH2Ad24p”
}
],
“call”: {
“function”: “generateIndexAndStake”,
“args”: [
{
“type”: “string”,
“value”: “3PQAhPM5iHQyYrAqTVts53UgiLGtVuSZ8xD”
}
]
},
“fee”: 500000,
“chainId”: 87,
“dApp”: “3PR1Qvi9mHT35SwWEkLSqqE2L8thiPLdVWU”,
“feeAssetId”: null,
“initialFeeAssetId”: null,
“proofs”: ,
“senderPublicKey”: “GDPfYHA6NUZCmin3J7LWZhCvSjBcna8HebyvQyrw17v”,
“timestamp”: 1687112458,
“type”: 16,
“version”: 2
}

PUP-3. TBD

1 Like

PUP-1: Yes.
Just wondering how it works with rewarding Power governors: voted for the rescue proposal, which for me included to stake the PUZZLE as one of the utilities to do regardless. Voting for this PUP, would reward/punish twice? leading to double taxing? (example: WUP (Waves Usage Proposal) lease WAVES to node, no reason to vote no and I don’t think investors would be happy to be reward WAVES DAO for doing this)

PUP-2: No.
Megapools APY are 10-20%, suggested pool has 9% APY(but is probably lower on average) with 600$ liquidity, WX PUZZLE/XTN pool has $5k with 1% APY. Not expecting a lot more fees with more liquidity. Better to stake it in PUP-1.

PUP-3: Depends on the projects, let’s see. So for now stake it in PUP-1.

1 Like

Hey Ivan!

The reason to do the proposal is DAO’s wallet cannot do any transaction without the signature, so all basic operations need to be voted, even if they are riskless.

Regarding PUP-2, as you might now, the more liquidity is in the pool - the more volume goes through it. Thus, there is a chance for the DAO to create a new major liquidity pool and get a “whale privilege”. PUZZLE token has some volume boost because of regular buyback, which happen every hour for Swap fees and approx once in a month for Lend fees. This pool will catch a big share of it. Btw I also think DAO might launch its own pool but it’s compex in terms of transactions signing, so maybe we should do it later.

Regarding PUP-3, as you might see stake/unstake operations require some voting, so it seems just easier to keep PUZZLE in the wallet, because new tokens are about to be launched in early July.

Thanks for your detailed feedback!

2 Likes