Season 2 Budget - *Temperature Check*

[Halfa]

Note that this Voting Temp. Check will be open until 27th December, 2024

In light of the upcoming Season 2 Wonderland coming, I would like to propose a budget for the community to consider, subject to on-chain voting, when on-chain governance has the CLOUD tokens, subject to discussion and further changes.

Keep in mind that this is a temperature check and NOT the actual vote proposal. This is to gauge the community interest and feedback of what we can potentially implement in the future with existing budget. - In the mean time, we’ll look to have this as a guide for the team to see where the community would like to direct it’s emissions to.

This is also a thread where Cloudmen would be able to continue discussions on what their thoughts are on how the Budget should be allocated, to which initiative and proposals available.

TLDR;
a. Allocation to Creator Coins & Sanctum LSTs - 12% allocation
b. Allocation to AER Staking idea proposal (by @Asimsy ) - 5% allocation
c. Allocation to Earnestness - 3% allocation
d. Allocation to Lending/DeFi Platforms for INF & CLOUD - 10% allocation

When you all have read the below budget, kindly vote on this poll:

• I agree to this Temperature Check
• I disagree to this Temperature Check
• I think differently (please let us know why)

There are various proposals already up that discusses to a certain effect as to how the allocation should be, so do take a look at them here (We’ll try our best to update most recent ones here):

1. LST Season 2 DeFi Tracking:

[Proposal] Expand Wonderland Season 2 LST Tracking to All Eligible Liquidity Pools

Objective: Enhance the inclusivity of Sanctum’s Wonderland Season 2 incentive tracking by expanding it to cover all liquidity pools that hold at least $100 worth of LSTs (Liquid Staking Tokens). This proposal aims to recognize and reward holders of LSTs who participate in various DeFi pools on the Solana network, thus fully embracing the liquid nature of LSTs and broadening engagement. Background: Sanctum’s Wonderland Season 1 offered rewards for users holding LSTs in either their wallet or s…

2. Retroactive EXP S2:

"Non-gameable" earnestness- and importance of retroactive EXP in S2

As most have probably realised, it will be difficult to reward earnestness how it was in S1. Going the same route will be difficult as people are now aware of it, and possibly trying to “game” earnestness for Wonderland 2. I think we as a community can try communicate and share ideas of how the team can possibly make earnest users rewarded. Naturally these ideas should be ones that are impossible/difficult to take advantage of for anyone who might wish to “game the system” I had one suggestion …

3. Gamified Point System - CLOUD/INF:

[Proposal] Balancing Decentralization in Sanctum's Liquid Staking Ecosystem

Objective: Solana’s native staking has demonstrated that without proper incentives, most liquidity gravitates toward the largest validators, undermining decentralization. This same issue is beginning to surface with Liquid Staking Tokens (LSTs) in Sanctum, where the majority of SOL is concentrated in the largest LSTs like INF and jupSOL. Background: The goal of this proposal is to introduce a dynamic rebalancing mechanism within Sanctum that incentivizes users to diversify their LST holdings.…

4. CLOUD/INF Pool S2 Incentives:

Vote for CLOUD/INF Pool Incentivisation for S2 & S3

Seeing that we are coming close to the launch of our CLOUD token… I was wondering if we can also put up a vote with regards to incentivising LP Pools for Sanctum. Would also love to vote on a proposal of incentivised CLOUD/INF pools on Meteora, using our locked/unlocked CLOUD tokens. This is to increase LP TVL incentives in S2 and S3 and maybe can be initiative to new and old token holders, see below. Could also have CLOUD governance work like: Stake CLOUD Weighted Governance voting on SVP Re…

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On to the core Budget Allocation Proposal which will cover:

i. How much available to plan for S2
ii. Current Proposals
iii. Season 2 Stream - Airdrop Allocation

During the discussions, we will also provide rough qualitative cost/benefit to CLOUD and/or TVL via indirect or direct means.

i. Current Available Allocation:
Thank you to the team for building in the open, we know that there is an allocation of:

300 Million CLOUD available for Budgeting the Season 2/3 Wonderland and beyond.

$CLOUD Genesis Mint and Accountability | Blog

ii. Existing Proposal idea to consider:

1. Sanctum Sanctuary - IRL Meetups
2. R&D + External Grants
3. Townhall
4. Cloudie.so
5. CLOUD/INF S2 pool
6. Community Grant Pool

These are to be included in part of the Earnestness Allocation - whereby active proposals and community pushes are incentivised.

Each proposal and active Sanctum initiatives are to provide detailed breakdown of:

• KPIs (growth metrics)
• Budget
• Others

iii. Season 2 Stream
a. Allocation to Creator Coins & Sanctum LSTs
Since Creator Coins are the most recent product release for Sanctum, it should be incentivised in Season 2 with an allocation that could continue forward for other seasons.

It would be great that instead of just allocating a weighted amount into the Creator Coins, I’d also propose that each Creator Coin would be able to have an onchain vote to decide how large their allocation is.

Cost
earmark 6% out of 30% of comm. pool supply for S2 and voting again on S3. An added dedicated 6% out of 30% to be used exclusively for INF. - total is 12%.

Benefit

• Growth of Sanctum TVL via Creator Coins & Increase in mindshare thru KOLs, Partners and Influencers.
• Added CLOUD utility
• Growth of Sanctum LSTs & INF

Potential drawbacks

• Creator Coins are 0% APY tokens for token holders
• Got to trust the Creators to manage their community and continue content updates.
• TVL reduction once incentives are over.

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b. Allocation to AER Staking idea proposal (by @Asimsy )
This is a time-tested ideal to push as we do want to incentivize the staking of CLOUD tokens. Will agree to said outlined:

Recommended usage of AER for voting:
5% out of 30% - 15m CLOUD tokens in S2 & S3+ round of voting.

Cost
The cost will be variable to the amount we decide on, but said cost will be 15m CLOUD for now.

Benefit

• Added CLOUD utility via the incentivization of staking and voting on DAO proposals.
• Growth of Research.Sanctum

Potential drawbacks

• Inflationary release of tokens
• Lack of voter interest

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c. Allocation to Earnestness
Hearing the community, reducing the ratio of earnest to TVL would provide a fairer outcome in the future. Reducing earnestness significantly will also be detrimental to the efforts being pushed since inception.

Hence, we’d earmark 3% of total comm Pool

This is to also include active proposals that have been working or to be worked on by future community members along with other “earnest” activities within the ecosystem.

This allocation is to assist in:

• Increasing IRL adoption of Sanctum
• Increase in awareness of Sanctum
• Growth of the ethos “The Earnest Shall build our New World”

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d. Allocation to Lending/DeFi Platforms for INF & CLOUD
It is quite evident that there lacks integration of both INF and CLOUD within the DeFi space, and to increase said usage and traction to increase attractiveness of INF and CLOUD as a product.

Cost
10% of total Comm. Pool Initiatives spread across various Seasons (2/3/4/etc).

Benefit

• Growth of Protocol Owned Liquidity (managed by Treasury) via LP pool fees between various incentivised LPs
• Increased DeFi footprint of main product, $INF
• Growth of LP pool for CLOUD as a Liquidity buffer
• Stay competitive amongst other LST providers in terms of liquidity offerings and utility for LST products.

Potential drawbacks

• Historically LPs are not sticky (see @richard_ISC earnest test with INF/ISC)
• Once incentives are over, there may be drop-off in TVL, which could be mitigated by a prolonged emission on all LPs

Would welcome the community to provide feedback and vote on what you’d like to see!

The Gloves are OFF.

The Earnest Shall Build Our New World

[Halfa]

Pertamaxxxxx

Very first

[Halfa]

Then this one goes nexxt,

Probs using it when we go thru the votes~

[JohnnyTheClown]

Thank for taking the time to put this together, a really good starting point for the discusion

@Halfa

a. Allocation to Creator Coins & Sanctum LSTs - 12% allocation

not in total disagreement, but feel it needs some fine tuning, personally air towards creator coins rather than full LSTs (jupSOL etc just as an example) seems the big players would get a big slice of the pie where smaller TVL LSTs would loose out

creator coins seems more a more realistc aim, but as of now we only have healthSOL so its difficult to say if they should all be included, maybe the charitable/goodcause creator coins where the operators use their rewards for the benefit of others

@Halfa

Allocation to Lending/DeFi Platforms for INF & CLOUD - 10% allocation

I remember in the early days of Sanctum, it was the teams desire that LST holders where 1st class citizens simply by holding, personally feel that giving an additional % allocation for using Lending/Defi Platforms goes against that ethos (potentially it could lead to those with very large ammounts of capital to deploy taking larger and larger slices of the pie. Ultimately hope that everyone wins comparable to the level of capital they are at.

Also which platforms would be included, which not, what happens it new players come into the field, and additionally always been said that its no small feat to track them all

(tried to keep short but give a sense of my thoughts)

@Halfa

Allocation to Earnestness - 3% allocation

No Issue with a Earnest Allocation, but needs careful consideration to what form will it take, it was a massively time consuming point of view it took the team a immense amount of time to go through everything, no just for the original recipents but also those that appealled

@Halfa

Allocation to AER Staking idea proposal (by @Asimsy ) - 5% allocation

Again no issue with a ASR approach, my thoughts would be, we need a govenance program/platform, as well as proposals that drive Sanctum forwards to discuss and vote on

Also feel that any approach like this needs a path to become sustainable over time

[Jdd0810]

Halfa.

I really love this temperature check as it also serves to gage the community sentiment in building a DAO (an idea proposed multiple times in the Sanctum’s research site).

I believe the voice from the community offers unmeasurable value to the protocol as it gives an outside perspective of the overall performance and alignment with Sanctum’s vision.

Thank you for posting this, brother.

[nicshodln]

I’d need a lot more detail to know if I’m really in favor of any of this except incentivized LP which is a no brainer and AER as people don’t stake in large enough numbers unless it’s incentivized by money because we’ve been conditioned that way. I’m not really in favor of carrying on that thinking by paying people to hold creator coins. If we do that then we might as well donate directly to the creator and skip the coin. I think investing in things that bring a ROI is a better idea for creator coins. If a project needs funding then it gets incentivized by allocations of their future token, if an existing project is building out a new feature and needs funding then they could get a stimi in addition to their rewards if they agree to some form of non token incentive to their LST holders, that could be lower fees, merch, gov privileges without having to hold their native token, etc.
I think a portion should be used to convert JitoSOL to INF or aligned LSTs. We need to take share away from them and if that means incentivizing trades then so be it, maybe offer zero fees during Wonderland to convert via infinity pool.

I’d like to see some high quality collabs and advertising. I’m talking about paying for professional marketing that can bring in not only crypto people but some targeted campaigns to get institutional investors to use Sanctum LSTs and then find some mouth pieces that can really get the word out and I’m not talking about some 2bit X “influencer” which is what kids these days are calling KOLs even though to be a true KOL you have to be an expert in your field and not a single person I’ve seen called a KOL is an expert at anything other than grifting. We need real transcendent voices that bridge the crypto and non crypto worlds, the Michael Saylor types.

Then use some resources to figure out how tf to be featured in wallets and stay visible. dApps that aren’t seen when people open the wallet browser usually aren’t used by anyone but the most loyal users. Becoming official partners with projects is another very important thing. How much would Jupiter charge to have a Sanctum tab at the top of their DEX? Whatever it is it would be worth it but they’re not the only option. The game is exposure because with great marketing you can sell a bad project but you can’t even give away free money if no one knows you exist.

A huge prospect is to collab with upcoming NFT projects by vetted teams and have a portion of the funds locked up in $CLOUD and LSTs or their own LST that they can use the rewards to give back to their holders.

What I don’t agree with is having any earnest allocation. The community funds you mention should be put into LP and profits from that should be what is used for things like IRL meet-ups, community channels, charities, etc. The community fund needs to be treated with fiscal responsibility and having it go out without it coming in is not responsible for anything that isn’t deemed necessary and it should be used very sparingly in the beginning because selling it at $0.34 to pay for wants means it cost 10x more when the price is $3.40 so if something can be put off without hurting the project then it should be.

[Halfa]

Love this feedback!

Thank you so much nic!

So your points are,

1. Yes to incentivised LP
2. No to Creator Coin incentivisation
3. Yes to incentives to take market share on other LSTs (i.e. jitoSOL)
4. Add Marketing Expense - further growth?
5. Increase Third-Party Data Integrations (Token Terminal, Sonar, Artemis)
6. Partnership with Third-Party (Sanctum Tabs on JUP)
7. No Earnestness Allocation at all.

[Halfa]

Learning as we go,

I think it’s good to start that discussion now before the eventual onchain votes and proposals are out.

[Halfa]

Thank you so much for the feedback JTC!

So your points are:

1. Yes to incentivise Creator Coins & LSTs, more on CCs
2. Holding LST > DeFi integrations. Need more details (fine tune) which DeFi platform?
3. No issue with Earnestness, but it’s time consuming. Needs careful consideration
4. Need governance ONLINE - drive it forward with discussions.
5. Require more fine-tune on future sustainability.

let me know more of what you’d like to see too!

[cho]

LFG
CC&Sanctum LSTs
(+) This allocation could indeed boost the visibility of Creator Coins through influencers, potentially leading to higher TVL. Allowing creators to vote on their allocation adds a layer of decentralization and community engagement, which is a commendable approach. It also promotes the growth of INF, which is a core product, enhancing its market presence.
(-) The lack of APY on Creator Coins might deter holders unless there’s a clear value proposition beyond monetary returns. There’s also the risk of creator engagement drop-off, which could impact community building efforts. Moreover, the sustainability of TVL post-incentives is questionable, potentially leading to a boom-and-bust cycle.

AER Staking Proposal
(+) Encouraging staking through AER adds utility to CLOUD tokens, potentially increasing their value and utility. It also promotes governance participation, which is vital for a healthy DAO ecosystem.
(-) The inflationary aspect could be a double-edged sword; while it rewards stakers, it might dilute the token’s value if not carefully managed. Additionally, the success of this initiative heavily depends on community participation, which can be unpredictable.

Earnestness
(+) This allocation respects and rewards the community’s grassroots efforts, which are essential for organic growth and adoption. It supports the ethos of rewarding genuine contribution, potentially fostering a more engaged community.
(-) Reducing the allocation might demotivate some contributors, especially if they feel their efforts are less valued. There’s a delicate balance to strike here between incentivizing participation and maintaining economic stability within the ecosystem.

Lending/DeFi
(+) Integrating more with DeFi can broaden the utility of INF and CLOUD, potentially increasing their adoption and liquidity. This could help in positioning Sanctum competitively in the DeFi space, enhancing both products’ market presence.
(-) The historical lack of stickiness in liquidity pools is a significant concern. The effectiveness of this strategy hinges on continued incentives, which might not be sustainable indefinitely. There’s a risk of TVL drop-off once incentives wane, unless there’s a strategy for long-term liquidity retention.

Luv you all.

[Halfa]

Clear concise points you have raised as well cho.

adds to feedback

[JohnnyTheClown]

Maybe against the grain, but after some consideration its a NO for Incentivization for LST and for Incentivization for Defi/Lending specifically for S2

Firstly it is my belief that all holders should be treated the same, whether simply holding in their wallets or utilizing in defi, both are perfectly fine and a personal choice, goes back to the teams ethos of all holders should be 1st class citizens.

i) Should someone who’s been holding say INF since the beginning and chose not to partake in defi be effectively penalised allocationwise for not doing so?
ii) If there was to be incentisation for S2 with a extra allocation for using defi would we not be effectively forcing holders to use defi so as not to fall behind those that do.

Unfortunately seems a bit PVP and not very PPP (that maybe a bit harsh but it is the feeling I get)

Creator Coins, are a different proposition, and would be in agreement that something could be done, although S2 maybe to early as current we only have one, so maybe something for the future

iii) my other issue with Incentivizing any DEFI for S2 is not all LSTs are readily available on these platforms, so we could have a situation where liquidity is moved from the LST providers without defi integration/Incentivization into those that have simply to chase any additional allocation (we may wish it otherwise and the founders and communities of Sanctum and Jupiter are activily working to change that, but we all know how mercenary the space and large parts of its users are)

That said we should aim to track as many as possible for points in S2
(Side note) We should work with Meteora, as any LST can have a pool there, which would be feel more inclusive)

If we wanted to Incentivize some INF and Cloud pools have no issue with that but there should be No advantage gained in S2 for doing so

hope that makes sense

[JaunePomme]

Overall I agree ,

I’d just maybe reduce a bit of all allocations by 1-2%, just to keep some more allocations for the future, just don’t want to burn too much suddenly. Knowing we’re in a Bullrun, people will love having these high numbers, but I do hope Sanctum will be there for a while so keeping some under the hood would be nice

[nicshodln]

That about sums it up. Marketing, LP, kill JITO, marketing, marketing, kill JITO, LP, more marketing

[Mimyk]

Hi Halfa, great job in putting this temp check together!

I think I see things very differently in terms of the percentage being allocated. First off I’d actually advise we don’t allocate most of the community funds explicitly off the bat, and instead only allocate what we need from now → approaching S3. This not only better constrains the planning discussion to the more immediately important, but also prevents the misunderstanding that we will drop the whole 30 supply over S2. (yes this will happen, trust me the fudder mentality is limitless).

With that out of the way I’d structure things like this:

~10% of total supply to S2 (matching s1)
remaining 20% of total supply for s3/s4/beyond

from that 10% (100m tokens) I’d recommend the following:
7% Protocol Interaction
3% Community engagement

This isn’t a distinction of ‘earnest’, I actually thing the concept of earnestness should be embedded into the calculations, not treated as some alternative allocation. Heres what I mean:

From protocol interaction (7%), we should consider 3 things:

• LST amount held over Season 2 (size)
• LST amount held vs farmed/sold since season 1 (conviction/loyalty)
• CLOUD held vs. sold since season 1 awards.

Conviction/loyalty and cloud held aren’t just ‘feel good’ metrics either, they determine how ‘sticky’ a participant is likely to be. if you farmed and dumped S1, or rotated back out of the LSTs, we are actually less interested in rewarding you with cloud vs even a newcomer who is holding consistently, and certainly less than someone who benefited the protocol thru season 1. And thats really what its all about, we want to limit how much we reward bad actors and concentrate rewards on those who actually bring market utility to Sanctum.

TLDR: Long term holders > hodling newcomers > prior dumpers

For the 3% community interaction:
What I recommend is actually a roles hierarchy. Temple DAO did this to great social success back in the day (though their protocol wasn’t as fruitful). Basically everyone starts as something basic, and goes up the chain:
cloud → cloud apprentice → cloud scholar → cloud knight → cloud master etc.

The only way to go up the chain is to get approved by 2 mods. This is done really easily with discord bots, where a mod can ‘give’ a nod/star/cloudvapor to this account that is having a positive effect on the community on some way. People are gonna spam for rewards but they’re easily blocked.

Advantages:

• community status is transparent and happens over the whole season, not one massive crunch at the end
• promotion history is easily recorded, bad actors can receive demotions for bad behaviour
• promoted users with cool roles become trusted sources of knowledge for the community, helping cut thru the noise without needing to be a mod or the team
• low effort system for the mods to see a great article or thoughtful response and give a user a star for it
• actively encourages good community engagement at all times because you can see the just rewards as they happen, there’s no hidden analysis or other such controversy.

For creator coins I’d actually recommend against exclusive cloud perks, I think large followings can roll thru and farm that out with zero benefit to Sanctum. The product is a cool idea and should do well on its own if the market actually uses it. If the only reason people use it is for the perks, we’ve made a bad product, no need to spend on that.
Inclusion of those coins as valid S2 pets should give them plenty of clout imo, they’ll get big crowds from the events as it is.

AES is cool, I’d drop that in a separate proposal though, I feel like its a big out-of-scope for wonderland planning. Its a slow-moving long term reward system that is good, but muddys the waters for newcomers interested in wonderland. Best to start it after S2 wraps up imo.

Community grants are dope, but we should be strict about our needs. I’ve seen too many protocols drop massive bags on parties (‘meetups’), insider embezzlement (‘marketing group’, ‘alignment research’, ‘community outreach/relations’) etc. IMO we should go needs-first. What does the community need, then from there we hear proposals in those categories. Jupiter has some solid technical working groups that I’d see as a positive role model.

Finally, a reminder that tokens can go a much longer way if we tighten up our spending and focus on revenue flow to $CLOUD. I still think any real token distribution we do rn should be focused on finding loyal and active community members with skin in the game, and we should wait until we get our mktcap up higher to do some serious spending.

[nicshodln]

@Mimyk

we should wait until we get our mktcap up higher to do some serious spending.

This sums up my main concern, that people want to spend while the token is severely undervalued and it’s just killing us long-term if we do. If something is necessary then so be it, we don’t have a choice, but everything else should be used for LPs or some other form of interest bearing utility that can then be used for funding without burning our initial capital to shit.

[Halfa]

As I mentioned in the discord, again thank you for raising your concerns!

And interesting take on Temple DAO, do you have a link example of their structure?

@JohnnyTheClown do you think @Mimyk points align?

@nicshodln Main clear point here is to not overspend on projects that does not accrue economic value and spend more on the things that will accrue value to the protocol yes?

[Halfa]

Kill JTO haha, I think that’s a hard word to use…

JIP09 discussion is going around quite ok -

JIP-9: Adopt Interceptor Liquidity Defense

[Mimyk]

Sure, here’s a link to their docs with some writings on their structure. They leaned heavily into a sort of cult-like culture, but I think the hierarchy itself was helpful as newcomers saw the different roles and knew who was trusted to take advice from and who was trolling.

Also it meant people who got roles wanted to help out others to keep progressing, and were less likely to put other people down because it risks getting demoted. Basically, the hierarchy cuts out chaos and creates a more orderly & transparent social display of earnestness.

Roles | Temple Rituals

[Tiggles]

@Mimyk

TLDR: Long term holders > hodling newcomers > prior dumpers

I don’t think that people that already claimed their earnest rewards and used them should be penalized. They may have needed the money. FP said that it was life changing money for some. Perhaps you can see if they claimed and stopped being active in discord or on other social platforms. If they just surface again for season 2 then maybe. Perhaps not get a certain multiplier for example. But just because they took profits when needed does not make them a dumper necessarily.

I am saying this as someone who did not receive earnestness during S1 so I am unbiased in this regard. I just feel that we don’t know everyone’s circumstances. They may have sold due to need but able to buy back in over time. You shouldn’t penalize people for using their gift.

I am aligned with pretty much everything else you said