Introducing Lobbyist Protocol
Lobbyist Protocol enables smart and deterministic payments for trustless KPI-based payouts of vote incentives to DAOs for anything from gauge votes, governance decisions, liquidity mining and even KPI-based grants. The only requirement is that the source of truth is open source and publicly available for verification.
What Is Lobbyist Protocol Solving?
Current solutions for vote incentives have several inefficiencies, as those lobbying DAOs typically deposit a set vote incentive amount in hopes that they get their desired vote percentage. Unfortunately, the entire amount gets distributed to all the voters for the desired option regardless of whether the targeted outcome is achieved or not, and there is no communication about more specific target metrics between the incentivizors and the voters. This is generally inefficient as, more often than not, the incentivizors end up paying more than they should have for the vote percentage obtained.
Lobbyist solves this problem through KPI-based vote incentives. This benefits both incentivizors and voters, as incentivizors are protected in case they do not reach the targeted outcome, and voters are able to price vote incentives more accurately and better determine a floor price.
The example below will help explain how this would help:
FRAX is the most successful player in the Curve Wars and they manage to get around 18% of the gauge votes week on week by paying around $6.5M in vote incentives. This amounts to $360k in incentives for every 1% in votes. With current solutions, even if FRAX gets just 15% of the votes, they would still pay the entire amount of $6.5M.
If they were to use Lobbyist, they can keep the payout consistent at 360k per 1%. If they only achieved 15% instead of 18% of votes, for example, they would have saved $1.1M dollars in incentives as they would only have to pay $5.4M [$360k * 15 (for the 15% of votes)] instead of the full amount with current solutions.
In addition to protecting incentivizors from losing all their funds in case they were not able to meet their targeted outcome, voters can price the value of each vote incentive more accurately and make better informed decisions regarding which pools get their votes. Lobbyist also helps establish a clear floor price in terms of $value / % of votes.
Incentivizors will be able to customize their payout however they want as their payout can be fixed or variable.
Also Useful For Governance Decisions
The scope of Lobbyist Protocol is not restricted to just gauge votes. Another important use case is governance decisions.
Let us assume that a new stablecoin wants to list on Aave v3. Under current vote incentive mechanisms, incentives get distributed to voters regardless of the outcome or the weight with which they voted.
Through a binary payout option, Lobbyist ensures that the system cannot be gamed as the incentive is only paid out if the desired outcome is achieved and only to those who have voted with 100% of their voting weight.
In such a situation, the incentive would only pay out under these conditions:
- The asset successfully passes the governance vote and gets listed on Aave v3.
- The incentive payout would only go to those who voted with 100% of their vote share.
The first version (v1) of Lobbyist Protocol will include both KPI-based incentives for gauge votes and also binary KPI-based options for governance decisions. Lobbyist Protocol will be a new primitive in the governance tooling space that establishes a new standard of efficiency and user experience in creating vote incentives for DAOs.
First Iteration
The first iteration of Lobbyist Protocol will focus on the biweekly vault incentive voting of QiDAO protocol. The Qi Wars are heating up as numerous players have skin in the game like Gotchi Vault, Tetu, Beefy Finance and several large individual whales who are actively looking to get a larger share of the weekly Qi borrow incentives.
Using Lobbyist Protocol, DAO incentivizors would be able to make any KPI-based payments in a completely permissionless and decentralized manner which was previously not possible as the payments were manually made by a trusted third party like Gotchi Vault, etc. Lobbyist’s smart contracts will also ensure uniformity in the payout so the overall experience for both parties is seamless.
Next Steps
Lobbyist Protocol’s contracts are currently under audit. In the coming weeks, more information about how Lobbyists works as well as the new possibilities it unlocks for both incentivizors and voters will be made available.
In the meantime, join the Discord server to chat with the team and learn more about the project and give us a follow on Twitter to stay updated with the latest developments.
