Pillar Balboa Begins! Token Burns, Community Funds & Liquidity Incentives

Pillar Balboa Begins! Token Burns, Community Funds & Liquidity Incentives

Written by

Drew Harding

June 17, 2020

We’re excited to announce the first set of initiatives as part of the Balboa program. Now we need your feedback - all of these are up to the community to decide on!

For those who have been keeping up with Pillar, you’ve likely seen our newly announced PLR tokenomics upgrade – Pillar Balboa.

Built with the core desire to better align incentives in a community-ran ecosystem, Pillar Balboa is an ongoing rollout to reinvigorate the PLR token with a suite of value accrual mechanisms centered around governance.

If you haven’t done so already, we strongly recommend joining our Discord for all things PLR!

Next up, we’re excited to announce the first set of initiatives as part of the Balboa program including:

  • 340M PLR 10-Year Burn
  • 200M PLR July Allocation
  • PLR Liquidity Incentives

With that, let’s dive in!

340M PLR 10-Year Burn

As our dedicated PLR holders know, Pillar’s smart contracts are set to unlock 340M Pillar in 7 years from now. This logic was grounded in the thought that with the growth of the Pillar Ecosystem, a gradual programmatic dilution would allow the project to always retain fair cost for usage of the Pillar Wallet.

While there’s been an endless amount of innovation in the wider ecosystem since launch, this progress did not correlate to mainstream adoption as fast as we had originally expected. As a result, we recognized that the 340M PLR supply infusion would have more of a negative effect than a positive one.

To this end, we want to be able to openly discuss the future of Pillar without the feat of this upcoming 340M dilution looming in the background.

To kick off Pillar Balboa, we would like to propose that these 340M tokens never enter circulation – better aligning incentives for long-term ecosystem supporters by preventing future dilution.

As it stands today, these 340M tokens are set to be issued to a Gnosis multisig address in July of 2027. We would like to open the conversation regarding the “Proof of Burn” with the following context.

The 340M tokens will be programmatically issued – meaning that we cannot stop this from happening. However, what we can do is choose how to illustrate that these tokens will never enter circulation. This includes:

  • Option 1: Creating a proxy address which controls the multi-sig wallet set to receive the 340M tokens. Set the owner of that proxy address to the official burn address – meaning no one can access the proxy address OR the multi-sig.
  • Option 2: Allow the 340M to be minted in 7 years, then immediately burn them to provide onchain proof they’ve been sent to a permanent burn address.
  • Option 3: Other – Let us know what you think could be a better alternative to Option 1 or 2!

As it stands today, we are leaning towards Option 1. We believe that this option gives us the ability to demonstrate the 340M burn today, rather than having to wait for the burn to happen in 7 years.

This is where we need you to chime in. Which option would give you the most confidence of this Proof of Burn? 

to 🔥 or not to 🔥?

Please head to Discord and navigate to the #governance topic under the PLR topic. Here we will be holding a poll to discuss the community sentiment on how to best address this issue.

Regardless of how this goes, we want to emphasize that this initiative is meant to serve as an anti-dilution mechanism. In fact, this is just the beginning of many future token economic decisions that will unfold as a part of Balboa.

Community Funding + Foundation Treasury

Next on the docket is the upcoming issuance of 200M PLR set to be minted in the middle of July.

Rather than simply adding these tokens to the circulating supply, we suggest splitting the 200M PLR evenly between the community (100M) and the Pillar Foundation (100M) – the entity responsible for managing the business and assets of the foundation. This includes tasks like: the approval of annual accounts, election of new members of foundation and auditors and regulatory signatory rights.

We aim to create a pegged unlock system in which any tokens unlocked by the Foundation trigger an equivalent distribution to the community pool (and vice versa). To this end, we want to give the community equal voting power over future governance decisions relative to the Foundation.

While Foundation tokens will be directed mainly towards future funding rounds, community tokens can be used on anything the community sees fit – so long as it’s handled through on-chain governance.

To kickstart this community governance, we’re proposing to unlock 20M PLR to both the community and the Foundation.

Beyond this first unlock, we’d like the community to help us decide if and when the remaining tokens should be released through on-chain voting.

Just as with the token burn, we’d like your feedback! Let us know what you think and what (if anything) we should consider to better align incentives between the Foundation & the community on Discord.

Now, you may be wondering – how is the community going to use 100M PLR?

Well, we’ve got a great first initiative!

PLR Liquidity Incentives

As pointed out by Vitor in Discord, right now PLR secondary liquidity is pretty thin. If someone wanted to come in and buy 10 ETH worth of PLR, they simply couldn’t without suffering from a large amount of slippage.

To combat this, we propose using the first tranche of community tokens to incentivize liquidity on decentralized exchanges like Uniswap.

For those who missed it, we recently created a liquidity pool for PLR/ETH on Uniswap V2. Now, we need your help on seeding it!

As a part of this effort, we’d like to incentivize those who provide liquidity to the PLR/ETH Uniswap pool with PLR rewards.

This new initiative to earn from staking PLR has a suite of benefits, namely through:

  1. Earning trading fees for providing liquidity
  2. Earning PLR through staking
  3. Earning additional governance weight

Better yet, we’re planning to offer this functionality natively in-app so you can stake, manage, and claim your rewards directly from within the Pillar Wallet.

In our next post, we’ll be outlining how PLR holdings correlate to governance weight in the Pillar Ecosystem. For now, just know that those participating in these programs will earn a governance multiplier – taking their voting power even further!

While we’re planning to start with Uniswap, there’s nothing stopping the community from applying these same principles to other platforms like Balancer or Bancor. The best part about community governance is that you help us make those decisions – along with how we decide to incentivize different trading pairs on different exchanges.

The Balboa Timeline

While we’re eager to set hard coded dates on the rollout of all these initiatives, we want this rollout to be an organic process driven by community feedback.

In fact, the best thing you can do is join our Discord and make your opinion known! The sooner we get the green light from you, the sooner we can get the ball rolling on the initiatives mentioned in this post and many more we’ve got in the queue.

To participate in governance today, navigate to the #governance channel and check out the pinned message. This is where you’ll be able to signal your stance on our first polls, as well as many more polls in the near future.

Until then, we’d like to thank you for your dedicated support to Pillar. We’re excited to embark on this mission together to build a self-sustainable ecosystem for a community-run Smart Wallet.

“Every champion was once a contender who refused to give up.”

Balboa out! 🥊