The purpose of this proposal is to define the design of the Shield Mining campaign and approve the transfer of 15,000 $IDLE ($100,000 USD at the current price of ~$6.667/token) from the Ecosystem Fund to the treasury multi-sig to fund the Nexus Mutual Community Staking Incentives contract. This represents approximately 0.87% of the Ecosystem Fund’s current holdings.
A Shield Mining Campaign can increase cover capacity and lower insurance cost to a target rate of 2.6% annually, allowing the community to access economical insurance and for an insured strategy to eventually be developed. Insurance can provide peace of mind — increasing stickiness of funds in the pool — and be used to attract new capital (especially from other protocols who are hyper-sensitive to the risks involved with all protocols)
After discussions with the Nexus Mutual team, we gathered the following information on past Shield Mining campaigns:
- Avg campaign had a reward rate of ~0.25 USD per NXM staked per week
- Avg campaign lasted about 4 weeks
- Time is dynamic and not an input; we set the reward rate and budget
- Every campaign successfully brought down cost of cover to the minimum 2.6%
- Given past campaigns stats, targeting 50,000 NXM staked on each contract (IdleDAI and IdleUSDC) should bring down the cost of cover to the minimum and provide significant capacity for the community
We believe a campaign in-line with other successfully executed campaigns (details of which were shared on the forum here) is the best route to pursue.
We propose a campaign that distributes $0.25 USD per week (0.0375 IDLE using a price of $6.667/token) to each NXM staked behind each of the IdleUSDC and IdleDAI contracts, with each campaign having a budget of 7,500 $IDLE. This aims to achieve 50,000 NXM staked behind each contract with a target length of 4-weeks, in line with guidance from Nexus Mutual on past successful campaigns.
At a current NXM price of ~$99, these rewards represent an APR to stakers of ~13.1% per contract staked behind. Given the ability to stake NXM behind different risks via Pooled Staking, NXM holders can earn an APR of ~26.2% for staking behind both contracts, which should be sufficient to garner at least 50,000 NXM (if not more) staked on each.
Note: Campaign length is dynamic. If 100,000 NXM were staked on each contract, the program would run for 2 weeks.
Upon successful passing of this proposal, the Leagues will transfer 15,000 $IDLE from the ecosystem fund to the treasury multi-sig. In sync with the Dev League’s completion of the insurance UI on Idle’s home page (towards the end of this month), and in coordination with Nexus Mutual on the marketing front, the Leagues will create and launch a Shield Mining Campaign for each of the IdleDAI and IdleUSDC contracts on the Shield Mining Sponsor Dashboard; the UI calls the function depositRewardsAndSetRate which will be set to the specifications discussed above.
Note on timing & $IDLE price: If the proposal passes, there will be a short period of time (target 7-14 days) between the transfer of $IDLE to the treasury multi-sig and funding/launching of the campaign (to accommodate completion of the UI on Idle’s home page and coordinate marketing with Nexus Mutual). If there is a significant change in the price of $IDLE, we may need to revisit the campaign details; if at the time of the campaign launching the 15,000 $IDLE transferred are worth materially more than $100k USD, the campaigns will be capitalized with $100k of $IDLE priced at that time and the remaining $IDLE will be returned to the ecosystem fund.
We are going to leave this thread open for comments regarding this implementation, and in about 24 hours, if there are no objections, we will proceed with the on-chain proposal and the voting phase.