PIP-60 - Expansion of Project Miro token and staking system to Base

Governance Proposals
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Abstract:

The following proposal aims to introduce the new token established in the Project Miro roadmap to Base. In addition, this proposal also aims to introduce the staking system to Base as well as to assist with liquidity provision on Base, as well as participation in staking rewards.

To offer a rapid migration to this new chain, we propose for the Laita team to develop a cross-chain migration facilitation tool which will assist existing stakers to move their staked assets from Optimism and Mainnet to Base if they would like to do so. This will also serve as a great showcase of the power of the intent-based systems we are moving forward with beyond aggregation.

We believe that the deployment of MIro to Base will help align the new token not only with a rapidly growing ecosystem, but also strengthen the ecosystem of ParaSwap DAO across rollups.

Goals & Review:

With the introduction of a new token deployment as defined in project Miro, the DAO has the opportunity to implement upgrades which are more feasible during the token introduction phase. One of these upgrades concerns the networks that the token and its staking system are deployed in. For example, the PSP token was only deployed in Ethereum Mainnet during its initial release, with Optimism Mainnet being introduced afterwards in 2022 with less overall TVL.

As there will already be a migration happening during the PSP to the new token migration, we believe that this is a great opportunity to expand to a new low-gas rollup while also building liquidity with it through the Balancer-based staking token we currently know as sePSP2. This proposal proposes to expand the staking system to Base. We believe Base has many features that make it the most sensible choice for the third network of deployment, including:

  1. Highest growth in activity and TVL among the Ethereum layer 2 networks in the past year.
  2. Presence of ParaSwap Delta.
  3. Integration with the superchain ecosystem along with Optimism Mainnet, one of the other chains the token is deployed in.

By deploying to Base during the project Miro migration, not only do we wish to enter a growing DeFi ecosystem, but also provide stakers with more alternatives for ecosystem participation outside of Ethereum mainnet.

Means:

Other than the approval of the DAO for the new token deployment in Miro , a successful deployment will require enough liquidity to be able to have liquid onboarding of the token. We believe that, were we to require existing stakers to manually move to the new chain, we would not reach enough momentum, which is why Laita is willing to assist with the migration procedure to Base. This, along with the migration incentives of Project Miro, should be sufficient to bootstrap sufficient liquidity.

While the staking distribution system will remain mostly unchanged in this proposal, one potential limitation we have noticed comes from the current way to calculate the claiming chain of rewards. With three chains, the current method of splitting rewards relative to the staking chain has the risk of splitting the rewards across multiple chains, bringing UX issues. For this reason, we also wish to change the claiming method from rewarding rewards relative to the chain to giving all rewards on the chain with the highest amount staked.

Implementation Overview:

  1. Introduction of the new token and its staking mechanisms on Base.

  2. Overall, the networks that the new token will be deployed in will be Ethereum mainnet, Optimism and Base

  3. Development of a cross-chain migration facilitation mechanism by the Laita team for stakers of Ethereum and Optimism to move to Base.

  4. Alter the chain distribution criteria, from sending rewards relative to the amount of each chain to sending all rewards to the chain where the user is staking the most.

Time of Implementation:

If passed, the following proposal will be implemented along with Project Miro’s new token release and migration , which we currently aim to deploy in late Q1/ early Q2.

Budget:

In total, Laita Labs wishes to request to the DAO a total of $40 000 USD, denominated in non-PSP assets – such as ETH and FTM currently leftover in the treasury- at the time of execution, and secured by the ParaSwap Foundation. This budget includes the cost for the migrator smart contract audit and development, as well as the migration gas execution costs. By onboarding the execution costs, end-users will not have to spend gas when using this module, reducing the burden to migrate and showcasing the benefits of intent-based execution.

The migration execution gas will be covered until either the migration budget runs out, or when the three-month migration window passes, whichever one comes first. Were the migration gas execution budget to run out, the DAO will have the option of approving an additional one.

Any unused budget - such as unused gas execution budget - will be returned to the DAO after the three-month migration window passes.

Risk Assessment:

The largest risk of this proposal comes from the upcoming migration assistance development. By auditing the module and testing internally prior to release, Laita Labs will work on minimising the risk of this new module.

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Thanks for your proposal! Excited to see this in production.

I have a few questions:

Is there any incentive for the staker to move to Base? Will the Balancer pool receive extra incentives?

As ETH mainnet has 90% of the sePSP2, and OP also provides lower fees, I guess that we need to have good reasons for the stakers to change chains.

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We have the 5% incentive pool for migration that we can use here. From Base public data, it has a high change of performing well!

Gas costs are the main motivation. We have a lot of small stakers that struggle to claim their rewards without losing a significant part to the network. Base is 30-100x cheaper than Mainnet at current low costs but can even go beyond 1000x when gas is a more expensive.

It’s also a good step ahead in the Superchain ecosystem that’s showing a great traction in terms of users, TVL and volumes!

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Some thoughts on Expanding to Miro

  • Leveraging Base’s Growth: It’s not secret of Base’s rapid growth in txns and TVL, and as a whole is a promising platform for ParaSwap’s expansion. Integrating with Base can enhance liquidity and user engagement, benefiting the entire ecosystem.​
  • Cross-Chain Migration Facilitation: this is high priority and needs to be properly developed. A well designed tool will allow for seamless asset bridges from Ethereum and Optimism to Base.
  • Enhanced Staking Flexibility: By offering staking options on Base, users can have reduced transaction costs and faster interactions, in support.
  • Liquidity Provisioning: Ensuring sufficient liquidity on Base is crucial. The proposed migration incentives and support from Laita Labs are vital to bootstrap this liquidity effectively.​

The request for $40,000 USD, appears pretty justified given the scope of development, auditing, and execution. Covering user gas fees during migration is a thoughtful approach to encourage adoption and demonstrate the benefits of intent-based execution.​

We would love to see some more info on the incentives distribution on base, as well as indepth timeline of execution.

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Thank you @Laita for this proposal. It makes perfect sense to prioritise Base - together with Ethereum mainnet and Optimsim - as this chain is the L2 with the highest DeFi TVL and has grown very fast and steadily over recent time.

We have two questions:

First, is it being considered that the new token to be used in Base will have a governance token function, as is happening today in Optimism, or do you not see the need for it and are simply considering the token expansion without gov function?

Secondly, regarding what you are referring above, do you already have an idea about this? If so, can you give us a preview of the new method of claiming rewards that you are evaluating?

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This is a great idea to showcase the power of intents during the migration to Base. Choosing Base is also a wise decision and makes sense. However, I would like to understand the reasoning behind staying on the Optimism Mainnet when migrating to Base would position us for Superchain interoperability and access to all its underlying chains.

From my perspective, there is little conviction left to continue supporting Optimism. It only complicates the user experience and increases the team’s workload. Instead, we should focus on supporting Ethereum for its high security and Base as a cheaper alternative with significant hype, including the potential for a Coinbase listing.
Regarding the following statement:

What if all or the majority of large stakeholders like @enerow choose Ethereum as their staking chain due to its superior security? This would mean that reward distribution would also happen on Ethereum, contradicting the stated goal:

To address this, I propose deploying the token on both Ethereum and Base, allowing governance and staking on both chains. However, reward distribution should happen on Base to ensure lower costs for smaller stakeholders. This approach would also support automatic and real-time (or at least shorter-period) reward distributions, preventing issues similar to the recent ones.

Finally, the requested budget is fair, and I would support future funding requests coming from tokens with high price fluctuations that are currently held in the treasury but do not significantly contribute to treasury diversification, such as $FTM.

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I also wanted to bring up an idea that could further enhance capital efficiency and liquidity management for our sePSP2 pools—Gyroscope’s ECLP (Efficient Constant Liquidity Pools).

Quick Intro to Gyroscope ECLP:
Gyroscope’s ECLP pools utilize Balancer’s infrastructure and pools, but the key difference lies in how liquidity is structured. Instead of the standard Balancer model, ECLP pools optimize liquidity distribution, leading to:

  • Higher Capital Efficiency – More effective price execution and improved LP returns.
  • Lower Impermanent Loss – Adaptive liquidity profiles help mitigate risk.
  • Gas Cost Optimization – More efficient routing and reduced transaction costs.

Since ParaSwap already integrates with Balancer, exploring ECLP could be a natural next step to improve efficiency without needing a complete infrastructure shift. Would love to hear thoughts on this—perhaps we could further explore the idea with deeper analysis or a test deployment.

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Hi Mehdi,

Totally agree with that.

Don´t agree with you. Reward distribution should happen on Base AND Ethereum. Ethereum for large stakholders (superior security - like you said) and Base for the small stakeholders and the institutionnal through Coinbase.

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Hey frens,

Super existed by the closeness of Project Miro implementation and fully encouraged by the enthusiasm for PIP-60 and the potential to expand to Base. The promise of lower costs and faster transactions could broaden our reach and I’m inclined to support this move, especially seeing the positive sentiment in the comments. That said, I feel compelled to reflect on what makes ParaSwap and Ethereum special, ensuring we don’t lose sight of Web3’s core ethos as we explore this path.

Ethereum’s strength lies in its decentralization, security and censorship resistance. Its vast network and plethora of stakers ensures resilience against attacks and protects user autonomy, a foundation ParaSwap has leveraged until now to empower DeFi users and degens alike.

Base, while innovative as an Ethereum L2, introduces trade-offs we can’t ignore. Its centralised sequencers, most in the hands of Coinbase, raises valid concerns. What it feels to me a single point of operation could be pressured to censor transactions something Coinbase’s history with regulatory compliance doesn’t dismiss or face downtime, unlike Ethereum’s unwavering L1.
On X, some critics have dubbed Base “not Web3” arguing its corporate oversight and closed-source design echo Web2’s gatekeepers more than Web3’s trustless ideal.
To stress that these risks don’t doom Base, but in themselves merit a thoughtful approach.

I see a bright way forward that could honor both innovation and our roots. Why not let our community shape this? Picture a system where stakers choose, sign a transaction, disable/enable kind of action, to either claim rewards on Ethereum for maximum decentralization or streamline them to Base for efficiency. That would repeatedly allow our new features be put to good use for both stakers and rewards claimers.

More so would like to point that with the Pectra upgrade the whole ETH ecosystem is heading toward affordability and would not pose, as we all seen for past couple of months, such a burden on gas fees, we could probably advocate that DAO to subsidise those L1 claims for stakers on Base but rewards released on ETH which would reinforce our commitment to ETH and be loyal to its ethos that we fought from the beginning.
Even more so perhaps for Base stakers, let’s experiment a little, deploy a Uniswap v4 LP where fees are shared among providers, boosting rewards beyond ParaSwap’s standard offerings.
This could spark a friendly challenge ETH advocates stay on L1, proving the value of security, while Base supporters migrate to showcase scalability’s edge. The results could guide us, showing which path delivers more for our users with a little SvS ( stakers vs stakers gamifications ).

I’m optimistic that a hybrid model could work despite at first thought could hinge on execution. Base’s sequencer needs reliability, the v4 pool would require tuning and DAO support, perhaps a modest grant in liquidity a little, buyback and make, would kickstart it.

As a delegate, I’d back a balanced approach but I want your input. Please let’s not abandon Ethereum’s values, let’s build on them or if I misunderstood kindly explain.

Can we make this a community-driven win that keeps Web3’s spirit alive?

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I don’t see why this would complicate the user experience; users will have the choice between OP, Base, or Ethereum. On the contrary, it’s an advantage.

In practice, this would mean:

  • Optimal flexibility: By offering a choice between multiple chains, users can select the one that best suits their needs in terms of security, fees, and transaction speed.

  • Risk reduction and better liquidity: Diversification across networks reduces the risks tied to a single ecosystem and facilitates liquidity sharing between chains, enhancing overall resilience.

  • Enhanced user experience: A multi-chain approach allows services to be tailored to each blockchain’s technical and economic specifics, providing a more optimized and accessible experience for all types of stakers.

There could be a risk of dilution and a shortage of stakers on a specific chain if staking is spread across three networks (Ethereum, OP and Base). However, this would assume that the total number of staked PSP remains constant.

In my opinion, the long-term goal would be to expand staking to other blockchains. Let me know what you think about this perspective.

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Expanding token to other networks is a smart idea if there’s potential demand for the token and if liquidity is decent.

As of now, Base is leading chain but things can change in the market fast. There might be another chain leading the mindshare in the future.

I would like to propose considering a multichain deployment approach via omnichain bridges, like Layzero OFT standard:

Pros:

• Interoperability: Enables seamless token transfers across blockchains.

• Unified Liquidity: Removes wrapped assets by locking tokens on the source chain or using OFTAdapter contracts for non-OFT tokens.

• Security: Uses decentralized validator networks (DVNs) selected by protocols via LZ v2 to customize security.

This way token is future proofed.

Of course, there are many more standards can be considered. Fluid (for which I am a delegate) did great research comparing all possible solutions (minus Chainlinks CCIP)

Check it here: $Fluid Multi-Chain Deployment: Evaluating Bridge Solutions - Governance - Fluid Governance

Although I am not sure if these standards are fit for Miro’s goals of governance as well.

Just my few cents here.

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We will support this proposal, as Base is currently one of the leading L2 chains in the industry with strong DAUs, and expanding alongside Project Miro makes a lot of sense. Incentives are an effective way to attract users, and the $40K budget seems reasonable given it covers smart contract development, audits, and gas costs. We also appreciate that the spend will be in ETH or FTM instead of PSP, which helps preserve the DAO’s native token. That said, we do have one question: if there are future plans to expand to other EVM chains, should we expect a similar cost structure each time? It would be helpful to understand the scalability of this model going forward.

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Well-balanced proposal! Is there any support Base could provide for this action?

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Having been involved in automating the rewards distribution process and gaining firsthand insight into its complexity, we appreciate the value of moving toward a more streamlined approach. We also see an opportunity to leverage a DeFi ecosystem that has attracted substantial TVL and trading volume recently, especially in light of the upcoming launch of the rebranded token.

In the coming days, we look forward to bringing more topics into the discussion that we believe can benefit from these proposed adjustments.

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Hey everyone, thank you for the lovely discussions so far! I wanted to share some of my two cents on the discussions so far as a DAO member, as I cannot speak for all of Laita.

Base has many interesting criteria that make it a good choice to focus staking on: it has low fees, incredible growth in TVL and activity, and integration into the broader Superchain ecosystem; this last point would mean that the two chains would get easily interconnected as the stack improves in the future, all while targetting growth in both chains in a single grant.

To give an example, if a user has 9% of their stake in Optimism and 91% on Ethereum, right now the rewards are split 9%/91% and bridged respectively. While this is relatively minor for two chains, splitting rewards into 3 could complicate the split, and have users have to claim up to three different times.

In the new system, if 90% of your stake is on Chain 1, 6% on Chain 2, and 4% on chain 3, 100% of rewards will go to Chain 1. This will facilitate the process and avoid potential issues of trying to divide by 3, like trailing numbers. Additionally, users will be allowed to choose through their stake composition whether to claim in base for low gas or Ethereum for higher security.

Internally, we considered this, but it’s worth noting that part of our grant to Optimism included setting up a permanent protocol-owned liquidity pool from grants. This grant brings 800k in liquidity which we are not sure could be easily moved, and would take confirmation from Optimism DAO to do so.

This sounds like an interesting development to explore! However, I am worried about how VP could be calculated on such a changing pair. Perhaps we could explore this for DAO-managed liquidity solutions in the future.

The debate of decentralization vs a faster and cheaper rollup is one that every staker has to choose, and we believe that by providing the option between a Stage 1 rollup (OP Mainnet), a growing rollup like Base and Ethereum Mainnet we allow the community to vote with their stake on which solution is the best.

Using the reward distribution mechanism shared above, stakers will also be able to decide which rollup they wish to receive their rewards for. This way, if a staker wants to maximally support Ethereum, they can leave their stake if they so wish.

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Thank you very much @0xYtocin, I got all my answers, glad we are keeping ETH close to chest and gamifying stakers options. Dare I say then ParaSwap is about to get Based ! LG

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Thank you to everyone that has shared their feedback and potential next steps for our staking system.

Following the positive feedback we have received from the proposal, we are initiating the 48hr frozen period for PIP-60.

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