DeFi governance is expensive and time-consuming.
It’s bad for the small fish: on-chain voting costs money every week, pricing out anyone who can’t afford Ethereum’s volatile gas prices. Additionally, vote-escrowed tokens, the most popular governance design today, don’t allow for vote delegation, creating an enormous problem of voter apathy and burnout.
It’s bad for the big fish: large institutions who hold fiduciary obligations to investors (which demand reasonable liquidity) can’t meaningfully participate in governance without mummifying their position. Onboarding meaningful amounts of capital into DeFi governance tokens is almost impossible if an investment partner must decide between 1) virtually no intrinsic yield, or 2) virtually no liquidity.
Enter pitchFXS
pitchFXS aims to be Frax’s deepest on/off-ramp for a liquid alternative to governance. pitchFXS is a liquid wrapper of a locked veFXS position, but it also retains its governance power. Staking pitchFXS entitles holders with:
- Automatic participation in Frax governance rewards on https://pitch.money
- Including general vote-delegation and its related yield
- Participation in the native boost of liquidity providing strategies
- Native veFXS yield
- Gauge incentive yield
Most importantly, pitchFXS is programmable like every other ERC20 - it can be borrowed against and combined with other assets to create novel mechanisms. The token’s voting power can be delegated to other individuals or groups, facilitating republic-like mechanisms to emerge from the original “1-token, 1-vote” democracy of protocol governance.
Where do I go?
Staking is live today on the open beta of our governance console.
The flow is simple:
- Users stake their FXS on the governance console, which is permanently locked and exchanged at a 1:1 ratio for pitchFXS.
- Then, as with existing vote-escrowed (ve) tokens, users can use pitchFXS to participate in governance. Except, unlike ve tokens, pitchFXS holders can delegate their voting power to Pitch, and automatically redeem and stake their rewards as pitchFXS. Users can exit the token at any point through the pitchFXS/Frax liquidity pair on FraxSwap.
- We're expecting to integrate with Frax’s native lending protocol, FraxLend, in the near future. Similarly, pitchFXS holders will soon be able to automatically compound their governance rewards into FXS if they desire.
- There will be no cost to stakers.
We will mitigate against the possibility of governance attacks by requiring that non-delegated pitchFXS be staked for a given time period before governance users can actively participate in non-delegated voting.
Why pitchFXS?
Liquid wrappers are not new to the world of DeFi. Our friends at StakeDAO and Convex offer excellent liquid wrappers with sdFXS and cvxFXS, so what makes pitchFXS unique?
- The primary difference between pitchFXS and cvxFXS is that pitchFXS has access to governance power and related yield. In other words, cvxFXS holders are not able to claim vote-incentives on platforms like https://pitch.money while pitchFXS holders can. This is because the FXS governance is effectively outsourced to a different DAO (CVX) with cvxFXS, while the governance remains with the FXS holder with pitchFXS. This also has implications for the borrowing power of the underlying asset, as one has cash-flow that the other does not.
- The primary difference between pitchFXS and sdFXS is Pitch’s native integration with Frax liquidity . For example, pitchFXS/Frax is already incentivized with a Frax gauge that earns 2268% APR, and this is just the beginning of many Frax integrations (Frax lend, Frax bonds, etc).
Yeah, you read that right: 2268% APR.
A special note to Frax/FXS LPs
The unlock is coming! More pitchFXS means more opportunities for whales/funds to enter the Frax ecosystem. There’s no compelling offering today that 1) participates in Frax governance, 2) earns related yield and 3) has meaningful liquidity. Significant adoption of pitchFXS could change the Frax governance landscape and empower new members to join the community.
Complete Integration
Our liquidity incentives platform is now part of a fully integrated user experience on the Pitch Governance Console. Now in an open beta phase, the console integrates staking with the incentives interface to deliver a powerful and convenient governance experience.
Got feedback? We encourage you to join our Discord and let us know your thoughts for a chance to win 100 pitchFXS ($500). The steps are simple:
- Follow @Pitch_Money
- Tag three friends, like, and retweet our recent Tweet
- And join the server to leave your feedback in #console-beta
We’re excited to hear what you think! We’re a group of open-source contributors and actively encourage members of the community to get involved. Keep in touch with us on Twitter and Discord to learn more!