Warlord: The first index for vote incentives

Introducing Warlord, a simpler way to get exposure to vote incentives in both Convex and Aura. This reduces the risk of being exposed to any one ecosystem while having potentially higher returns over the long term.

Context

Over the last few months, the Paladin DAO has implemented a treasury strategy called "Warlord". This strategy has centered around key assets, namely CRV, CVX, BAL and AURA which are farmed via the DAO’s Quests. The approach struck a powerful balance between accumulating strategic voting power and maximizing profits which is possible through Quest’s budget control features. From then on we started to see the potential for an automated flywheel that could benefit Convex and Aura holders, less DeFi-native users, and the rest of the Paladin ecosystem. This synergy is possible with the creation of what will be the first vote incentives index, $WAR. 

Overview

Using the original Warlord strategy and understanding its bottlenecks and weaknesses, we were able to design a better approach to Warlord with a single focus: vlTokens. To mint $WAR users will need to deposit CVX or AURA with a maximum of 10,000 $WAR allowed for each vlToken. At release, Warlord will only count vlCVX and vlAURA, allowing up to 20,000 $WAR to be minted but any other vlToken deemed strategic can later be added by Paladin governance.

$WAR will be backed by the vlTokens held inside Warlord with the system designed to automatically accumulate its target assets while supporting its underlying ecosystems. The CVX and AURA deposited to mint WAR will instantly be locked into vlCVX and vlAURA. The voting power will then be delegated to Paladin-voter to start participating in Curve and Balancer Gauge voting rounds and earn voting incentives from Quest and other platforms, alongside the native yield from the vlTokens. In the case of farmed CRV or BAL, they’ll be staked into their wrappers cvxCRV and auraBAL, to continue earning CVX and AURA that'll be looped into more $WAR for stakers to increase their position over time.

Again, revenue from the vlTokens locked in Warlord will be redistributed to $WAR stakers. To receive this yield, $WAR holders will need to stake their tokens meaning holders that choose to become liquidity providers will forfeit their yield to other stakers. As outlined, when CVX and AURA is earned they’ll automatically mint $WAR which will be distributed via the Staking module. CRV and BAL will be converted to cvxCRV and auraBAL, respectively, and distributed in that form. The remaining yield and vote incentives will be swapped to ETH.

Users can burn their $WAR tokens (with a small withdrawal fee) to redeem either CVX, AURA, or both tokens, through a queue system. They will need to wait for the native vlToken unlocks to enable the desired amount of tokens to be available for redemption.

$WAR and hPAL Holders

Upon release, the Paladin DAO will deposit all available CVX and AURA into Warlord, with the locked versions to be transferred upon unlocking. The minted $WAR will be redistributed to hPAL lockers through consecutive periods, based on their lock amount and the remaining duration of their lock. For example: a hPAL holder who's currently locked for the maximum 2-year duration will receive the full amount of $WAR, while another user who had an initial 2-year lock but only has 1-year left before their unlock, will receive only half of the $WAR. Any undistributed $WAR from a period will be distributed the next period, following the same logic.

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Convex and Aura voters will no longer have to bother about how to compound their positions. Warlord will manage and optimize the accumulation of both assets through its battle-hardened yield strategy.Likewise, Paladin will continue to grow its strategic assets and support key pillars of DeFi as Warlord will be another complementary governance weapon in our arsenal for partners to leverage.Lok'tar ogar …