Incentivize small investments and voting

Help small investors and create a great community.

We started to take the first steps as a community and now we have the right and the duty to participate all together and make proposals in order to help the growth of IDLE and the whole ecosystem. Obviously many of the people who participate are small investors and do not have the ability and the possibility to invest large amounts. A self-respecting community must take on everyone’s problems, especially its weakest members.

In the last eight months we have seen the cost of gas for transactions reach very high levels and this leads to discourage the use of DeFi by many small investors, who would see the already few gains made due to the high cost of investment and withdrawal operations. This problem could preclude the possibility of using idle.finance services for many people with small capital.

  1. Incentivize the cost of gas for all those investments below $ 1000
    My idea is to incentivize the cost of gas for investment operations in pools by creating a specific fund powered by a percentage of the Governance Treasury. The gas would be paid for by idle protocol in order to help small investments and grow the community. This incentive can also help use the platform as an investment fund, allowing users to make monthly payments of small amounts and/or create a Dollar-Cost Averaging (DCA) fund.

  2. Incentivize the cost of gas for Governance votes.
    As a community we are required to vote on the proposals and initiatives that are presented to improve the protocol and the entire ecosystem of the platform. Many people, especially small investors, do not participate in the voting also due to the cost of gas which would erode the already small gains made. My proposal is to encourage voting by making the protocol pay for gas, drawing on an incentive fund.

The use of meta-transactions could also be hypothesized, as has already happened in the past through Biconomy, using a platform fund or also finding sponsors who can cover the costs for the incentives.

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Very good arguments.

Question: will this still be an issue in a couple of months as L2 scaling solutions start to roll?

Unfortunately I don’t see L2 scaling for lending platforms soon, neither compund nor Aave currently have solutions to be put on the mainnet in a few months.
I believe that the gas price problem remains for a long time to come for some platforms.

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I like the idea of promoting participation by small holders, though I think there are some alternatives to this that could also be considered. The first thought in. my mind is a batch deposit system. Where users just need to send their tokens to a deposit address, then on a regular schedule, perhaps once a week, all funds will be converted to their idle conterpart.

Example:

  1. Alice sends $100 USDC to batch deposit address on Wednesday.
  2. Bob sends $200 DAI to batch deposit address on Thursday
  3. On Friday all USDC deposits are converted to IdleUSDC(Yield or Risk Adjusted), and DAI deposits are converted to IdleDAI(Yield or Risk Adjusted).
  4. Alice receives $100 worth of IdleUSDC, Bob received $200 of IdleDai

This may be a naive approach, as this process will probably need to be controlled by a smart contract, and the gas cost of interacting with the batch deposit should be as minimal as possible. In the example for steps 1 and 2, the smart contract will probably have to keep track of users and their deposits.

Another issue is for step 4, the smart contract could send the IDLE tokens to their respected depositor, or it could create a claim to the tokens which Alice and Bob can call to get the tokens sent to them. Though this introduces another user interaction which might be less ideal, and will cost the user gas.

Regarding governance incentives, this would only be an issue for onchain voting, offchain voting on snapshot is free.

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I always consider malicious/mad man attack when discussing about incentive system.

  1. Incentivize the cost of gas for all those investments below $ 1000

In that case, I can easily divide my wallets below $1000 to avoid gas fee. Since Idle is non-custodial platform, I don’t think there’s any practical method to prevent this behavior.

  1. Incentivize the cost of gas for Governance votes.

I can agree on that. I’m not sure about HOW to enforce off-chain’s decision to on-chain wallets but AFAIK, we have 3 diffent fund for community usage. I think FeeTreasury fund and Ecosystem fund can be use to incentivize governance voting. (=paying gas fee) LTLP Fund is already hardcoded for its usage, and I prefer LTLP stay as it is.

and again… this can be sybil attacked too. I can divide my $IDLE to 0.01 per wallet and vote to deplete funds… :sweat_smile: So if we decide to paying voter’s gas fee, we might need some kind of batch transaction to prevent sybil attack. It can also cut down the expense of paying gas fee!

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We wrote this contract https://github.com/Idle-Labs/idle-contracts/blob/develop/contracts/IdleBatchConverter.sol and used in the past to batch migrate user funds from older versions of Idle protocol to newer ones. It’s really simple and can be slightly modified for this specific purpose.

We used to make batched migrations like every 2 or 3 days so if you have a lot of funds to deposit you will loose more in terms of missed interest so I think it mostly depends on the batch frequency you want to use

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IDLE token also supports the permit pattern and voting/delegating by signature if needed to reduce or subsidiaze gas costs. This https://medium.com/compound-finance/compound-autonomous-proposals-354e7a2ad6b7 from Compound can also be used to broaden the governance participation

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Im a small fish personally though my fund is invested. I am interested in this personally.

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When fees were at their highest it could be 20 to 30 dollars or more for a deposit. That’s a lot if you only want to deposit a few hundred dollars worth. I think batched deposits are great for people who want to make small monthly contributions of a few hundred dollars.

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