Background 
Following implementation of Stargate's incentive program on Velodrome, TVL for the STG-USDC pair has grown over $7M and currently offers a 80%+ APR. Stargate has moved its $1.5M POL on Optimism to Velodrome to capture these VELO rewards as proposed. Given the strong initial results, we believe Stargate has the opportunity to make its incentive program more capital-efficient by reducing the weekly cadence of incentives and increasing the time period of the program. 
 
Proposal 
Stargate will reduce weekly bribes on Velodrome from $100k to $25K in STG, therefore expanding the length of the program from 4 additional weeks to 16 weeks. It will also move an additional $1M in POL to the pool to farm and lock more of the total emissions. 
Extending the program from 4 to 16 weeks will give Stargate additional time to measure results of incentives on Velodrome, including VELO emissions, lock bonuses, and voting rewards. 
 
If the STG-USDC pair on Velodrome continues to performs well, Stargate will additionally have the option to migrate additional POL to Optimism to add to Velodrome and receive additional VELO emissions. Stargate will be able to deploy the VELO rewards as bribes in following epochs and/or lock a portion as veVELO to significantly reduce the need for STG emissions while maintaining a robust liquidity layer on Optimism. 
 
Execution 
Stargate will use the remaining $400k in STG incentive program to bribe the STG-USDC pool at a rate of $25K per week for the next 16 weeks. Velodrome will match a 15-20% of Stargate's bribes each week. 
 
Once a voting epoch is completed on Wednesday at 23:59 UTC, VELO emissions will flow to Stargate's LP. Additionally, Stargate will lock all VELO farmed as veVELO allowing it to build a voting position that will direct additional emissions to STG pools in perpetuity, while generating fee rewards, bribe rebates, and bonuses for locking. Any rewards generated by these locks will be compounded further into veVELO. 
 
Locking veVELO will also earn additional bribe boosts as outlined here.

Background 
Currently Stargate has protocol owned liquidity across each of the original seven chains it deployed on. These are Ethereum, Avalanche, Polygon, Fantom, BNB Chain, Optimism and Arbitrum. Each liquidity pair sits in a DEX, providing liquidity to trade STG and earning fees from trades. 
 
Proposal 
Velodrome is the leading DEX on Optimism and the top Ethereum Layer 2 DEX with over $300M TVL. It serves as the the primary liquidity hub for the quickly growing Optimism ecosystem, serving 2x - 3x as many protocols of comparable DEXs. 
 
Velodrome works by directing VELO emissions to liquidity pools based on votes by veVELO (vote-escrow VELO) holders. Protocols can use veVELO or voter incentives (bribes) to attract votes and emissions for their liquidity pairs. In the last voting round, bribers received $3.5 in VELO for every $1 in bribes on average. 
 
On top of the bribe multiplier, Velodrome incentives will match at least 25% of Stargate's bribes per the "Tour de OP" incentive program, if Stargate moves $1.5M of POL (protocol owned liquidity) to Velodrome and bribes STG-USDC pool. Combined, the bribe multiplier and bribe match can yield a 4X+ impact on liquidity incentives for STG-USDC. 
 
The LP will still be used and routed through all aggregators, resulting in the same execution, but an APR higher than what Stargate is getting on the current Uniswap pools will be paid. 
 
If this pair performs well, Stargate will additionally have the option to migrate additional POL to Optimism to add to Velodrome and receive additional VELO emissions. The Velodrome team will also work to promote Stargate through their ecosystem, onboarding new users to Stargate. This aligns Stargate with a large and engaged community of DeFi users. 
 
Stargate will also lock farmed $VELO rewards as veVELO to significantly reduce the need for STG emissions in the future while maintaining a robust liquidity layer on Optimism. Additionally, locking veVELO will automatically qualify Stargate for a Lock Bonus, typically worth 30%-40% of the VELO locked, paid in OP. 
 
Execution 
$1.5m of POL will be moved from the Uniswap LP pool to Velodrome on Optimism. Simultaneously, Stargate will begin test run worth $500k in STG to bribe the STG-USDC pool at a rate of $100K per week. Velodrome incentives will match at least 25% of Stargate's bribes each week. 
Once a voting epoch is completed on Wednesday at 23:59 UTC, VELO emissions will flow to Stargate's LP. If successful, this proposal will result in a higher APR to Stargate's LP and a significant reduction of STG emissions over time. 
 
For the purposes of the pilot, Startgate will focus on locking all VELO farmed as veVELO to build a veVELO voting position and maximize the ROI provided by "Tour de OP Incentives. This will also earn Stargate additional bribe boosts and lock bonuses which will be compounded into more $veVELO, creating an exponential effect to early $veVELO accumulation. As that position grows, it will direct additional emissions to STG pools, generate fee rewards and bribe revenue that can also be compounded into additional $veVELO. 
 
While the focus during the course of this pilot will be to maximally compound rewards, once the veNFT position reaches DAO targets, the DAO can begin to repurpose fees, bribes, and emissions for other purposes. The goal being to reach a state where the DAO can bribe and sustain liquidity without needing additional $STG emissions.