PIP# 1 has recently passed, which is a great step in the right direction to bring additional value to vePTP holders. However, integral to that proposal is that fee sharing will be executed by buying back PTP and distributing fees in kind as described in this post by the Platypus Team: Introducing Fee Sharing: Empowering vePTP Holders through Revenue Distribution | by Platypus.finance | Platypus.finance | May, 2023 | Medium
While on paper this might seem like a good idea to create buy pressure on a token, we’ve seen this in practice actually have the opposite effect; where the native token essentially becomes a “farm and dump” token. Once fees are paid out, a large subset of users sell the token for other tokens creating perpetual downward pressure on the token. This is why, Trader Joe (TJ), a leader in the Avalanche defi space, specifically designed fee payouts to sJOE holders in USDC rather than in JOE token.
Ultimately, what works for TJ might not work for Platypus. However, I’d prefer that we don’t reinvent the wheel and leverage learnings from our peers. There was no discussion in PIP#1 around the mechanics of the fee sharing and since it’s yet to be implemented there is time to discuss options.
The proposal here is very simple: keep fee sharing as intended by PIP#1 but updated the execution so that the fee sharing payout will be in a reliable stablecoin (USDC, USDT, DAI, etc)
The benefit of this is to remove the sell pressure flywheel. If fee generation from the platform is robust, the PTP token will benefit by fostering users to seeking to acquire more PTP organically ( buy pressure without the associated sell pressure) to capture a larger fee share.