DAPG - Tané: Velora Staking Boost Campaign

[Tane]

Hi DAO members and contributors,

Here is our submission for the DAPG. While it’s not an overhaul of the VLR tokenomics nor an innovative feature, we believe it can be a low-hanging fruit change, and interesting experiment to run. (This idea is similar to @citizen42 's submission DAPG – Citizen42, but our proposal requires less technical work. We sympathize with their view in its last comment, but we can also work on bigger initiatives in parallel.)

It would be great to have feedback/discussions on this topic and consider what we can do with the Velora growth going forward.

1. Identifying title of the idea: Velora Staking Boost Campaign
2. DAO-recognized name: Tané
3. Individual or Organization?: Organization
4. Twitter handle: https://x.com/tanelabs
5. Details of the idea: Our proposed idea introduces a temporary 3-epoch tier-based APR boost campaign utilizing the tier system used for the gas refund program and tries to keep/increase the stakers. The details are added below
6. How will this idea help VLR growth: Covered in the idea below
7. Mapped KPIs or expected impact: In the most bull scenario, more than 25% price increase with a few assumptions. Details covered in the idea below
8. Preliminary feasibility assessment: We assume a minimal off-chain script and UI change are required while no smart contract change is needed.
9. Who should be involved in the implementation?: Definitely WakeUp Labs, potentially to be reviewed by Laita team.

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Velora Staking Boost Campaign Proposal Idea

Abstract

Velora recently retired its gas refund program, which previously served as an incentive for active traders and stakers. To maintain strong staking participation and stabilize long-term alignment, this proposal introduces a temporary 3-epoch tier-based APR boost campaign. Using the existing VLR score tiers, stakers will receive multipliers of +5%, +10%, +15%, and +20% on top of the base APR. This temporary structure limits long-term emission risk while keeping the current stakers and driving short-term staking engagement.

Motivation

The discontinuation of the gas refund program risks reduced staker activity and weaker protocol alignment. A replacement incentive is needed, but must avoid creating permanent inflationary obligations.

A 3-epoch boost campaign addresses this by:

• Increasing staking participation in the short term
• Reducing circulating supply in the medium to long term
• Keeping emissions limited to a predictable window
• Allowing data-driven evaluation before renewal

This approach leverages Velora’s existing tier system and provides an effective transition away from gas refunds.

Specifications

Tier Structure

Reusing the previous tier definitions:

• Level 1: 10,000 VLR score → +5% boost
• Level 2: 100,000 VLR score → +10% boost
• Level 3: 500,000 VLR score → +15% boost
• Level 4: 1,000,000 VLR score → +20% boost

Effective APR during campaign (assuming base APR = 20%):

• Level 1: 21%
• Level 2: 22%
• Level 3: 23%
• Level 4: 24%

Technical Requirements

The current staking reward distribution relies on an off‑chain calculation process, with reward amounts submitted to the claim contract like this one.

Based on WakeUp Labs’ blog, rewards are computed off‑chain and then made claimable through the contract. To integrate the temporary boost campaign, the following changes are required:

Smart Contract Layer (Claim Contract Integration)

• No changes are required.

Off‑Chain Reward Engine

• Update reward calculation backend to:
  • Apply the multiplier (+5/10/15/20%) for the appropriate epoch.
  • Identify user tiers based on VLR score.
  • Generate boosted reward amounts for submission.
  • NOTE: assuming a TypeScript script to be modified by utilizing the gas refund program logic and the tier considerations into the reward distributions, which should be relatively a low-effort change compared to the whole smart contract change and/or the tier/score logic change.

Frontend / UI

• Display boosted APR per tier.
• Show campaign countdown (three epochs).
• Add reward breakdown: base APR + boost multiplier.
• (Remove the gas refund icon)

Safeguards

• Campaign automatically ends after three epochs (no further emissions)
• DAO must explicitly renew or modify structure
• No changes to token inflation parameters outside campaign

Staking Distribution & Emission Estimate

This section consolidates how staker distribution informs the expected emissions during the three-epoch (~84-day) boost campaign.

Staker Distribution Overview

According to a Dune Analytics query:

• Most wallets fall into lower VLR score tiers.
• Most of the total staked VLR is held by mid- to high-tier stakers.

This distribution means:

• A large number of users will receive +5% to +10% boosts.
• A significant portion of stake will receive +15% to +20% boosts.
• The campaign’s blended APR will sit above the 20% base APR.

For modeling, this translates into single blended APR assumptions:

• +25% staking growth → ~22% effective APR
• +50% staking growth → ~22.5% effective APR
• +100% staking growth → ~23% effective APR

Estimated Emissions Over Three Epochs

Baseline emissions at 20% APR:

• ~66.62M VLR/year ≈ 16.66M VLR per three-epoch period

Additional emissions under the boost campaign:

• +25% staking → +6.2M VLR
• +50% staking → +12.0M VLR
• +100% staking → +21.6M VLR

Estimated Impact

The following metrics are sourced from the public Velora dashboard and CoinMarketCap as of Nov 24, 2025.

Data Snapshot

• Total VLR supply: 2B VLR
• VLR staked in seVLR: 333.12M VLR (~16.66 % of supply)
• seVLR TVL: 2,456,606 dollars (~80 % VLR / 20 % ETH)
• Unique stakers: 711
• Circulating supply (current): ~1.6669B VLR
• VLR price: 0.006 dollars
• Market cap (derived): ~10.0M dollars

These values serve as the baseline for modeling the impact of the proposed boost campaign.

Base Scenario: -10% Staking Decline (No Campaign)

Following the retirement of the gas refund program and no replacement incentive:

• Staked VLR decreases from 333.12M → 299.8M VLR (−10%)
• Circulating supply increases from 1.6669B → ~1.7002B VLR
• Implied price (constant 10M market cap): ~0.00588 dollars
• Mechanical price impact vs current (0.006): ~−2.0%

Growth Scenarios With the Boost Campaign

Assuming the campaign successfully drives higher staking participation:

Scenario A: +25% Staking

• Staked VLR: 333.12M → 416.4M VLR
• Circulating supply: ~1.5836B VLR
• Implied price: ~0.00632 dollars
• Price impact vs current: ~+5.3%
• Price impact vs base decline: ~+7.2%

Scenario B: +50% Staking

• Staked VLR: 333.12M → 499.7M VLR
• Circulating supply: ~1.5003B VLR
• Implied price: ~0.00666 dollars
• Price impact vs current: ~+11.0%
• Price impact vs base decline: ~+13.3%

Scenario C: +100% Staking (Bull Scenario)

• Staked VLR: 333.12M → 666.24M VLR
• Circulating supply: 2B − 666.24M = ~1.33376B VLR
• Implied price (constant 10M market cap): ~0.00750 dollars
• Price impact vs current: ~+25.0%
• Price impact vs base decline: ~+27.5%

All of the above assume a constant market cap of ~10M dollars, so the price effects are purely mechanical outcomes of changing circulating supply.

Behavioral Expectations

• A meaningful share of boosted rewards is likely re‑staked, further reinforcing locked supply.
• seVLR’s structure encourages longer‑term, aligned participation rather than short‑term farming.
• Users onboarded during the campaign are likely to remain staked beyond its completion, especially if the experience and UI clearly communicate long‑term benefits.

Comparison To Emissions

Scenario	Emission Increase (VLR)	Implied Price (USD)	Impact vs Current	Impact vs Base Decline
Base (-10 %)	0 (baseline)	~0.00588	-2.0%	N/A
+25% staking	+6.2M	~0.00632	+5.3%	+7.2%
+50% staking	+12.0M	~0.00666	+11.0%	+13.3%
+100% staking	+21.6M	~0.00750	+25.0%	+27.5%

This table consolidates cost (emissions) and mechanical impact (implied price uplift) for each participation scenario.

NOTE: Emission increases and mechanical price impact should not be compared directly. Emissions represent short‑term token outputs tied to APR, while price impact is a mechanical reflection of circulating supply changes under a constant market cap assumption. Emissions may increase temporarily, but staking growth reduces circulating supply, meaning the two metrics operate on different axes and cannot be evaluated on a one‑to‑one basis.

Timeline

• Governance discussions and approval: 4 - 6 weeks
• Implementation + integration + testing: 4 - 6 weeks
• Campaign launch: approximately 8 to 12 weeks after approval
• Campaign duration: three epochs (~84 days)
• Post-campaign analysis + renewal decision: within 2 weeks after completion

[boardroom]

Thanks for this write-up. The tier system is well thought out. The point of discontinuing the gas refund program was, in part, to refocus our resource use/optimize the treasury to help drive protocol growth in the long-term. We can see your point around this leading to reduced staker activity, but we’re more inclined to continue being a bit more conservative and continuing with the direction of favoring protocol savings over increasing APR (even if temporary). Happy to hear other opinions though

[PGov]

We like how this proposal uses existing infrastructure (VLR score tiers, off-chain reward engine) to test a targeted, time-boxed incentive in response to the gas refund sunset. Framing this as a 3-epoch “campaign” rather than a structural change to tokenomics feels directionally right. To make the experiment as informative as possible, we’d suggest committing up front to a clear measurement framework: e.g., track changes in total staked VLR, unique stakers by tier, stake distribution between small vs large wallets, and “retention”. If we can isolate those changes relative to recent trends post–gas refund, this becomes more than “higher APR for a bit” and instead a structured test of whether APR is actually the right growth lever for Velora.

We do share the treasury-efficiency concerns raised a little. One way to reconcile both views might be to introduce explicit guardrails: a hard cap on incremental emissions for the campaign, and a requirement that any renewal or follow-up incentive structure must demonstrate a minimum improvement in one or two key metrics. You could also consider slightly compressing the tier boosts or concentrating more of the upside at lower tiers to avoid over-rewarding the largest existing holders while still encouraging broad participation.

[Sov]

Thanks for this dropping a few questions:

The APR increase is only 1-4% in absolute terms. Is there evidence this moves behavior meaningfully?

The tier structure gives the biggest boost to Level 4 stakers who are already most committed, while fence-sitters get the smallest. Seems this might be backwards for retention.

Hope this helps. Thanks for coming up with some new ideas.

[Mehdi]

Appreciate the effort to brainstorm ideas to help the growth of the Velora token, but there are issues not only with your proposal, but also with the current staking model. I’ll start with the staking module, which I’ve pointed out multiple times before.

The big issue is that we’re leaking value outside our ecosystem by distributing ETH to stakers, even though their contribution to the product and the Velora token is minimal. We should keep in mind that Velora is not a PoS network, so we’re not paying stakers to secure the network. Our incentives should be structured in a way that supports both the product and the protocol. The current implementation is somewhat aligned with that idea, but it’s not as effective as it could be. One suggested improvement is introducing tiered discounts for stakers, which would create a more direct benefit and stronger alignment between staking and actual product usage. This way, we can potentially turn our daily users into stakers and attract actual protocol users, instead of just attracting idle capital and yield hunters.

[SEEDGov]

Hi @Tane, thank you for this idea!

First, we would like to ask a question regarding the Dune dashboard you created, which served as the basis for analyzing the proposed idea:

We noticed that in the query editor, you included only the balance of seVLR staked on Ethereum, without considering the Velora staking also taking place on Base and Optimism.

We kindly ask for clarification on these points, because if the data analyzed does not include staking across all three networks, then the conclusions, calculations, costs and potential effects of the idea could vary significantly, meaning the Dune dashboard would need to be adjusted and the proposal reanalyzed.

Regarding the substance of the proposed idea, we want to be honest and consistent: as a general rule, with few exceptions, SEEDGov tends to be quite reluctant to support incentive programs across the different governances we participate in. Experience shows that, in most cases, these programs end up triggering farming behavior from large capital players. These actors join once incentives go live, significantly but artificially increase TVL, and once the program ends, they immediately exit to hunt for incentives elsewhere. As a result, TVL drops sharply back to pre-program levels, resources are spent without generating new users, without sustainably increasing TVL or activity, and the only outcome is the farming of incentives that are usually sold right away, creating unwanted sell pressure on the incentive token.

In short: there are no tangible benefits, only a waste of resources that ultimately benefits opportunistic whales who leave as soon as the program ends.

The most recent example is Unichain. TVL on that network collapsed by 86% immediately after the incentive program ended (source: DefiLlama, more here):

In this specific case, since Velora’s staking system currently pays rewards in ETH, adding an extra bonus in VLR may not create value for the token and might instead generate selling pressure. Given that the proposed program would last three months, wouldn’t you think there be incentives for users to sell the VLR rewards to “take profit” from this temporary and extraordinary bonus, rather than reinvest it into staking?

We acknowledge that we have a bias against incentive programs, but we also recognize that there are successful exceptions where they did contribute to increased TVL or user acquisition. For this reason, we want to proceed very cautiously before supporting this idea and would like to hear what the rest of the community thinks. And even if, at some point, the staking system were updated to pay rewards in VLR or seVLR, do you believe that a temporary 1% to 4% APR boost, on top of the base APR, would be attractive enough to bring in new stakers who otherwise would not participate without such an incentive?

@Tane

Baseline emissions at 20% APR:

• ~66.62M VLR/year ≈ 16.66M VLR per three-epoch period

One final clarification on this: staking rewards are currently paid in wETH, not in VLR. We understand that presenting calculations in VLR may help illustrate the potential size of the boosted rewards, but we believe it’s important to state this clearly to avoid confusion.

[Tane]

Thanks for all the feedback from the fellow delegates, @boardroom @PGov @Sov @Mehdi and @SEEDGov. We will try to address points raised in this thread.

@boardroom

but we’re more inclined to continue being a bit more conservative and continuing with the direction of favoring protocol savings over increasing APR (even if temporary)

What do you consider we would use those “savings”? Would that lead to a significant growth in VLR? With Velora being at its growth phrase, the DAO needs to consider how to maintain the mechanisms that works and continue to invest in the growth. Our idea wouldn’t be it, but we believe this is a good starting point.

@PGov

One way to reconcile both views might be to introduce explicit guardrails: a hard cap on incremental emissions for the campaign, and a requirement that any renewal or follow-up incentive structure must demonstrate a minimum improvement in one or two key metrics.

We could consider having a hard cap on incremental emissions based on simulations should this idea be considered to move forward. As it’s proposed as a temporary campaign anyway, we will definitely analyze the key metrics before/after the campaign.

@Sov

The APR increase is only 1-4% in absolute terms. Is there evidence this moves behavior meaningfully?

We wouldn’t know until we experiment this idea. We see similar cases in Coinbase One Card tier systems for rewards and other real world examples.
As numbers in relative terms look attractive enough, we assume the potential stakers would keep their stakes or increase their stakes for higher rewards.

@Mehdi

One suggested improvement is introducing tiered discounts for stakers, which would create a more direct benefit and stronger alignment between staking and actual product usage.

We thought about it, but how do we treat “users”? Only for the Velora frontend users? How do we treat those discounts in the system? Less fees for solvers?

@SEEDGov

We noticed that in the query editor, you included only the balance of seVLR staked on Ethereum, without considering the Velora staking also taking place on Base and Optimism.

This analysis has been used only to analyze the distributions of the stakers, thus only using Ethereum data doesn’t significantly affect our whole points.

@SEEDGov

In short: there are no tangible benefits, only a waste of resources that ultimately benefits opportunistic whales who leave as soon as the program ends.

We would argue that incentives for LPing like Unichain one are easily taken advantage of; as you mentioned, they can immediately move their assets into other opportunities, potentially with other incentives. On the other hand, for this campaign, they need to stake their assets with a lock-up, which leads to more reluctant behaviors from stakers.

@SEEDGov

In this specific case, since Velora’s staking system currently pays rewards in ETH, adding an extra bonus in VLR may not create value for the token and might instead generate selling pressure.

Thanks for pointing this out. This could be mitigated if we provide a mechanism to encourage users who claim the VLR to stake/delegate them.

@SEEDGov

do you believe that a temporary 1% to 4% APR boost, on top of the base APR, would be attractive enough to bring in new stakers who otherwise would not participate without such an incentive?

Again, we wouldn’t know this until we experiment this. We still believe we can experiment this with minimal changes to the system, but if not, we would like the DAO to discuss how to mitigate risks for stakers to unstake their seVLR after the gas refund program ended.