I do not agree. It is too early for a proposal like this. This steals from Peter to pay Paul.
sSpell holders could be rewarded with nIce to compensate until its even revenue AT BEST.
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Popsicle takes a cut of trading fees generated by LP positions. Leveraged LP positions means more popsicle revenue.
What if the total fees generated by popsicle from leverage farming are > the total fees generated by Abra for providing the leverage. In this case, shouldnāt ice be sharing fees with Abra and not vice versa?
I think the point is we donāt know which project stands to benefit most from this arrangement. Only a holistic assessment of revenue and cost (via inflation) from BOTH protocols will be adequate to decide on an appropriate fee share.
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in this deal, popsicle donāt take a fee at all, itās a product co-developed by Abra and popsicle and that Abra fee is the only fee charged to the user, but yeah Iāll write a post to better explain my thinking
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As others have pointed out, calling this a 50/50 split of fees between Abra and Popsicle is quite misleading, since 50% of Abra fees will be shared with Popsicle and 0% of Popsicle fees will be shared with Abra. In the sake of transparency, it would be best to amend the proposal to more accurately describe the fee share structure.
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In regards to the proposal itself, there needs to be an analysis of costs/benefits for both Abra and Popsicle resulting from the proposed integration and fee share. This analysis would help determine an appropriate fee share % (and whether or not a one sided fee share is appropriate).
While I do want to see this integration, and do believe there is strong synergy between these two platforms, Iām skeptical that the 50% fee transfer from Abra to Popsicle is fair to sSpell holders.
I believe that these numbers and analysis need to be published before voting takes place on this proposal.
EDIT: I admit i may be misinterpreting this proposal and am very open to further explanation if so. Thanks!
Side note: Thanks Abra team, you guys rock - keep up all the good work!
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@zvo @0x7d54 @GarrettZ Iām tagging you 3 because you raised similar concerns regarding Abra sharing itās revenue and popsicle not doing so.
In this product, the only fee generated are generated by the Abracadabra contracts, popsicle doesnāt charge fees.
Also, the only fee Abra would share are the fees generated by this product co-developed by both projects, the rest of abracadabraās fees still go 100% to Abracadabra.
Since itās a collaboration of both product the fees are shared between the 2 (at a ratio that needs to be debated) but Popsicle doesnāt āshareā fees because it doesnāt collect fees on this. Just wanted to make that clear
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I hereby concur with this proposal. Send it
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Seems odd, that popsicle would turn off its performance fee, but only for leveraged positions.
Is there a reason for this approach?
And I would assume the Abra fees on these leveraged LP positions would be a bit higher than others? As the user would be effectively paying for 2 services in one. Still a great deal for users, because the average fees on Abra are very low, as far as defi products go.
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Love the new forum! Now that we have it thought Iād share my thoughts.
I the 50/50 fee share can work when itās made clear this only applies to the V2 LPās in the form of PLPās. Future joint product offerings can have their own proposals and discussions.
One minor tweak to the fee formula I saw suggested in discord (which may have already been mentioned here and I missed) is to either remove or reduce the amount of the liquidation fees that popsicle receives as part of the rev share. The inclusion of that feels like a misalignment of incentives. Happy to be convinced otherwise and also donāt feel too strongly either way.
As for the overall risk to Abra in sharing rev at all for this particular partnership and how tight Abraās marginās are, we might be able to mitigate the risk there through the usual cauldron management the team does. Starting with conservative allocations of MIM and building up as Popsicleās product proves itself.
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Got it, thank you so much for this clarification. I still think it would be a good idea to run some numbers to determine the best fee split but i feel much more comfortable with this proposal now. Thanks again, really appreciate the follow up.
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I donāt agree with this proposal. A UI update shouldnāt cost 80/20 let alone 50/50. Spell holders are already dealing with massive inflation and are willing to stomach this in the meanwhile so the network can gain adoption. Changing the game with a 50/50 split mid game just ruins it for spell holders.
Should both projects collaborate? Sure but they should both be able to stand on their own. We see collaboration between multiple projects in the defi space but have never seen a system where a UI update warrants fee sharing. We have no information on what revenue Popsicle generates on it own and donāt even know if addition of Abra to the poposicle UI is going to drive additional adoption which Abra canāt do on its own.
Itās too early in the game to flip the script on Spell holders.
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This has me even more concerned/confused.
Are you saying that normal LPs have to pay 20% of their revenue to popsicle, but leveraged LPs pay 0? This doesnāt make any sense to meā¦
Or, are you saying that the 20% LP revenue fee is included in the 50/50 split? This would make a lot more senseā¦ But the initial post doesnāt mention LP revenues, only the Abra borrowing/interest/liq fees.
Iām assuming you mean the latter. So basically the 50/50 share covers all fees that would normally be generated by both protocols. If this is the case I think Iām onboard.
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Without Popsicle there is no liquidity to leverage and therefore no fees for abracadabra, and without abracadabra there is no leverage engine for popsicle. 50/50 seems fair for me as Popsicle wonāt charge users for additional fees on top of it, so itās not really abracadabra fees but Abra x Popsicle fees.
This doesnāt seem correct because all of the liquidity that Popsicle is gaining from this is coming from Abraās incentivized Curve Pools and could be used on other cauldrons that are full. The demand for MIM is immense in the existing cauldrons and if that liquidity were deployed those cauldrons Abra wouldnāt be sharing the fees along the way. If this wasnāt the case then I could see how this makes sense but I just donāt see a fair argument for why Popsicle and Abra shouldnāt just charge their standard fee for each product. It also sets a precendent of Abra offering deals to some and not to others which ideally wouldnāt happen with the scope of the project.
In a more neutral view Popsicle has 3 other competitors (Visor, Unipilot, Gelato) in the market and if werenāt for sharing team members/core investors across Abra and Popsicle I donāt think that this would be a discussion/open initiation to them.
Last thought I had that I havenāt seen voiced is that there are no parameters set as to what the fees will be on pools, seeing how Popsicle is going to wave all the standard fees on its end. So currently Abra is being asked to give up 1/2 of ??? while paying to provide 100% of the liquidity. Having some more hard numbers around any of this would be helpful.
Perhaps Popsicle spins up another Curve pool with Abra that has dual incentives to bootstrap the liquidity for this and then there arenāt any questions about who is paying/benefiting more.
Thanks for your time,
Duo
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We are not talking about Fragola or Limone here, these product do charge a fee. This is essentially a new product, co-developed by abra and popsicle that only charges the user once, through abra and fees are split between the 2 protocols at a ratio that need to be further discussed IMO
I agree, considering the limited scope of this proposal and the additional work needed, not to mention TIME, for Spell to do this separately or with another party the 50/50 proposal is worth it. #keepitinthefamily 
My question would be how often are these proposals going to be reviewed and what is the mechanism if changes are needed whether it is to reconsider the split or even to cancel this?
The bar is - and should be - really high for governance proposals involving the two protocols given the major overlap of the team, and especially when the proposal involves taking revenue from one protocol to another. That bar was not met here. A lot more could be specified, for certain. But also, if this new product doesnāt generate any revenue on its own, then I think we need to question whether it makes sense to develop it. Abracadabra margins are already razor thin and there is a continuous cost to maintaining the ecosystem (e.g. peg). It seems like it would make more sense to save that powder for products that would earn abracadabra full revenue share or even gather more in various ways per the amount of MIM in circulation.
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I strongly reject this proposal. If Pop.finance/ICE makes strategically sense, there should be an incentive to merge the communities.
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I fully agree with you in the sense that the proposal needs more thought. Regarding the product, it does generate fees, (fees that abracadabra wouldāve never generated alone since itās essentially acquiring new users), that are captured through abracadabraās regular borrow/interest/liquidation fees.
Regarding the necessity of such product, I really think itās the first step towards fully optimized levered LP which is a product the space greatly needs, but I understand how it feels from abracadabraās perspective, and even if both projects are within the same ecosystem and the same Frog Nation (which is really more than a meme), we gotta put more thought into how we split the revenue generated by that product.
I didnāt realize that this would be a new product outside of Fragola. Iām not sure many others realize this either.
With this new information, a 50/50 split seems fair.
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Thoughts are my own and do not engage the team at all.
That proposal is an important one and clearly shows the value of a governance forum, discussion has been happening and is of great quality so itās already a win for the Frog Nation!
Some personnal thoughts and details regarding this proposal after understanding a bit better the extent of it:
First of all: Iād like to remind the community that this deal only affects the future Abracadabra x Popsicle products. It does not imply sharing all of Abraās revenue, only the part that is from that common product
I think it wouldāve been better to say that Abracadabra and Popsicle would co-develop a product and that the fees would be split between the 2 co-developers, but thatās a communication issue
Second of all: For this very proposal, the product co-developed is a āsimpleā V2-style Leveraged LP position. Itās a product where abracadabra provides a leverage engine and popsicle provides a user base of LPers and an interface they are used to using. This product does not include an optimization by popsicle like Fragola does or Limone will do, and that for me is an important value proposition that would clearly justify such a fee-slipping model.
To Conclude: While this proposal and product mark the beginning of the synergie between Popsicle and Abracadabra, it needs more thoughts into it.
In my opinion, we shouldnāt explain it as Abra sharing itās revenue but as Popsicle and Abracadabra generating revenue and splitting it up.
Also, while providing the user base and the interface is really valuable for the product, and therefore for abracadabra, I think the 50/50 model is a bit unbalanced in abracadabraās de-favor.
While providing a product that is Levered Optimized LP would justify a 50/50 split of the revenue, I believe that without that optimization that will arrive later on, we should have a 70/30 split between Abracadabra and Popsicle, and do 50/50 when the product will include the Optimization that are core to Popsicleās mission.
TLDR: Change the proposal to a 70/30 fee in favor of abracadabra, or a split that is dynamically adjusted based on how much TVL Popsicle brought to abracadabra, when the product is āsimpleā leveraged LP and do a 50/50 fee split when the product becomes a Levered Optimized LP.
8 Likes
While the idea looks interesting, the premise is not so great. The selling point for this integration is that a LP cauldron from Trader Joe at Avalanche is not being usedā¦
Did we try to open a cauldron for Sushi or Uni LP at ETH mainnet to see if thereās no interest from users āoutsideā āourā ecosystem (Abra, Popsicle, Time)?
Looks like it was made an extrapolation taking an edge case as example.
I would like to see more examples of the ādifficultiesā or ālack of interestā before commit more dev work on something that may not need to be fixed.
Proposal: to create cauldrons at ETH mainnet for popular LPs tokens of Uni and Sushi, to get more data to understand if the issue is really that Abra is not the place where ppl think about āLPingā.
I, myself, think about Abra as the place to LEVERAGE current positions that I have, or to BORROW against it.
Disclaimer: I own all flavours of Frog Nation Tokens
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