[AIP-3] Handling of Governance Vault’s Early Withdrawal Penalty
Dear Alpacas,
We published an article last month on the early withdrawal feature for the Governance Vault Governance Vault Part 2 Is Here!
In the article, we outlined the penalty structure for an early withdrawal:
The penalty for early withdrawal will be 0.75% of the withdrawn amount per week of remaining locked time. ( There needs to be a sufficient penalty so that those who would consider early withdrawal could not game the mechanism by choosing a long lockup duration for higher APR, and then withdrawing early. )
Example:
Alice wants to perform an early withdrawal of 100 locked ALPACA from the Governance Vault, but her position still has 65 days locked time remaining. Alice will have to pay:
Penalty = 0.75% * roundup(65 / 7) = 7.5% of the withdrawn amount
And she will receive: 100 ALPACA * (100% — 7.5%) = 92.5 ALPACA
How the penalty from early withdrawal above will be utilized is the focus of this discussion thread. In the article we proposed the following:
50% of the penalty will go towards weekly burn 50% will be distributed as rewards to the Governance Vault’s stakers in the following week.
AIP discussion thread: https://forum.alpacafinance.org/t/aip-3-handling-of-governance-vaults-early-withdrawal-penalty/258
Voting
Five voting choices are presented and users can vote by Ranked Choice Voting (IRV) . More info: https://docs.snapshot.org/proposals/voting-types
Option1: 100% to burn
Option2: 75% to burn 25% to stakers
Option3: 50% to burn 50% to stakers
Option4: 25% to burn 75% to stakers
Option5: 100% to stakers
| Voter | Cast Power | Vote & Rationale |
|---|---|---|
 0x4Ea2...2fE592 | 1.139M | (1st) 50% to burn 50% to stakers, (2nd) 100% to stakers, (3rd) 25% to burn 75% to stakers, (4th) 75% to burn 25% to stakers, (5th) 100% to burn |
 0xDeE0...6b8fCC | 1.085M | (1st) 75% to burn 25% to stakers, (2nd) 100% to burn, (3rd) 50% to burn 50% to stakers, (4th) 25% to burn 75% to stakers, (5th) 100% to stakers |
 0x4B78...7d87bC | 985,574 | (1st) 50% to burn 50% to stakers, (2nd) 75% to burn 25% to stakers, (3rd) 25% to burn 75% to stakers, (4th) 100% to burn, (5th) 100% to stakers |
 0x29Fe...5335EF | 853,604 | (1st) 100% to burn, (2nd) 100% to stakers, (3rd) 75% to burn 25% to stakers, (4th) 50% to burn 50% to stakers, (5th) 25% to burn 75% to stakers |
 0x0Cd9...b22187 | 589,162 | (1st) 50% to burn 50% to stakers, (2nd) 75% to burn 25% to stakers, (3rd) 100% to burn, (4th) 25% to burn 75% to stakers, (5th) 100% to stakers |
VOTE POWER
Proposal Status
- Thu March 24 2022, 04:25 amVoting Period Starts
- Mon March 28 2022, 10:00 amEnd Voting Period
Current Results
1-50% to burn 50% to stakers
11.294M
2-100% to stakers
2.302M
3-100% to burn
1.941M