Summary of Changes
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In line with the ecosystem’s evolution and the redefinition of the delegate role, the goal is to raise the level of requirements and distinguish between traditional delegate scope and other contributions, assigning different compensations accordingly, in order to encourage contributions that have a concrete impact on the protocol.
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To achieve this, we propose to divide the program into two clearly defined parts or buckets:
- On one side, focusing on the activity of the delegates, the previous 4-tier system is maintained, but with reduced compensations.
- On the other side, a new system is introduced to reward extraordinary contributions which can be accessed by delegates participating in the program.
This approach preserves the role of the traditional delegate, with reduced responsibilities, workload, and compensation, while simultaneously creating the right incentives for delegates with greater commitment and alignment, who make extraordinary contributions.
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The program applications will remain open all the 6-months period to all delegates who meet the minimum requirements to apply, with a maximum of 15 delegates receiving incentives monthly. Therefore, each month, participating delegates will be ranked by their participation to determine the top 15 who will be rewarded.
Summary
Based on the final evaluation report for Delegate Program Cycle 1 which can be found here, we propose renewing it for a Cycle 2 for a 6-months term with the new parameters proposed here.
Abstract
The proposed changes to the parameters for this new Cycle 2 have been designed based on the insights gathered, the feedback and data collected and analyzed from Cycle 1, and the current estate of the ecosystem and the specific needs Velora is facing. This is a pivotal moment in the protocol’s history, marked by a rebranding process, the launch of a new token, a focus on intent-based architecture, and the rollout of new features. In this context, the DAO is expected to work closely with Laita to help drive the protocol forward and ensure its success.
The ultimate goal of the DAO must match the success of the protocol. Governance processes, therefore, should not be an end in themselves, but a means to provide structure and direction in support of that goal and this Program must be a tool to achieve that. With this in mind, Cycle 2 aims to raise the bar and increase expectations, fostering a higher level of alignment and commitment from delegates with the DAO mission, while implementing incentives that safeguard the treasury’s sustainability.
Goals & Review - Motivation
Antecedents
For background information on which this proposal is based, we encourage you to read the Final Evaluation Report for Cycle 1.
Velora Contributors Program (VCP) - Cycle 2 for a 6-month term
With the results analyzed, understanding that the Cycle 1 has been a success and has more than fulfilled the objectives pursued, we propose renewing it for a 6-month second cycle with the modifications outlined below.
As the main change, we propose to split the program into two parts, drawing a clear distinction between the traditional delegate scope and the delegate which contributes in other valuable ways.
And as a minor change, we propose renaming the program to Velora Contributor Program (VCP), thats aligns the program more closely with Velora’s brand while reinforcing the concept that the program aims to encourage delegates to be DAO contributors.
New System – Contributor Points Parameter
- Across the ecosystem, we are witnessing a shift in the DAO model and a redefinition of the traditional role of delegates, which is losing prominence compared to the growing importance of contributors who make high-impact to the protocol and its DAO. A clear example is Sky (formerly MakerDAO), which has significantly reduced compensation for delegates —currently set at $48,000 annually, and limited to just 4 delegates — while actively promoting the role of the Key Contributor, who is responsible for high-impact work and is compensated significantly more. A similar experience is being seen in Arbitrum, with a complete reformulation of the delegate system and compensation currently under discussion.
- Based on that, and aligned with the ecosystem sentiment, in this new cycle, we propose to divide the program in two parts or buckets to differentiate the compensations between a delegate who fulfills the traditional activities and a delegate who, in addition, makes other types of extraordinary contributions:
- Traditional Delegate participation: The participation in reviewing and providing feedback on proposals (with varying degrees of depth), voting, and presenting justifications is both valuable and necessary. However, this type of participation does not involve additional contributions that have a more significant impact on the DAO or the protocol. Therefore, should be compensated for the effort involved by maintaining the previous 4-tier system, but at a lower level than those who go further.
- Extraordinary Contribution participation: A different approach should be taken for compensating delegates who adopt a more proactive and impactful participation, demonstrating greater commitment, alignment, and dedication to the protocol, as they contribute substantially beyond basic governance, whether by engaging or supporting the protocol in extra-governance areas. This type of extraordinary contribution is the most valuable, the one Velora needs, and the one the DAO should reward more generously.
- To better reflect this distinction, a new system parameter called ‘Contributor Point’, scored from 1 to 5, will be introduced to proportionally calculate compensation for extraordinary contributions, with a maximum of $1,000. This system is reserved for delegate who meet two minimun requirements during the month:
- Have made an extraordinary contribution.
- Have qualified for one of the Tiers based on their Total Participation delegate system.
- The current tier-based system remains in place, but to align it to the new contributor system and strengthen incentives, compensation for Tiers 1, 2, 3, and 4 will be reduced to $750, $1,000, $1,250 and $1,500 respectively.
- Here’s how the new two compensation systems will work:
- Delegates participation compensation:
- Tier 4: Vote and submit rationales but have missed some of them.
- Tier 3: Perfect voting and rationale participation, with limited or no additional forum participation.
- Tier 2: Perfect voting and rationale participation and consistent and more relevant engagement on the forum.
- Tier 1: Perfect participation and stronger governance activity.
- Extraordinary Contribution participation compensation:
- Contributor Points 1 to 5: Delegates who qualified for the above-mentioned system and also make high-impact, quality contributions (governance or extra-governance).
- Delegates participation compensation:
- Both systems are independent but can overlap. For instance, a delegate who, in a given month, only fulfills the duties of a traditional delegate may qualify for the 4-tiers system and receive the corresponding delegate compensation. Conversely, another delegate who, in addition, also carries out extraordinary contributions that earn Contributor Points will qualify for both systems in the same month and accumulate the compensation from each.
- Consequently, the maximum monthly reward remains at $2,500, but this can only be earned by delegates who qualify for Tier 1 and achieve the top score in the Contributor Points.
Duration
The program’s second cycle will last for six months from September 2025 to February 2026.
Requirements to Participate
- Minimum Delegation 1M PSP tokens or equivalent in USD if migration to the new token takes place during this Cycle 2 as a product of Project Miro.
- Have a Velora forum account with a minimum age of 3 months at the time of applying.
- Have created a delegation platform in the Delegation section of the forum with the appropriate template.
- ≥ 80% participation rate in voting in the last 3 months prior to application.
- Apply in the application thread that will be opened if this proposal is approved. Delegates who took part in Cycle 1 and want to join Cycle 2 must apply again.
Number of Delegates to Receive Incentives
Given the current state of the DAO and the size of its treasury, we propose maintaining the number of delegates incentivized in the Program at 15.
New Criteria for Selecting Incentivized Delegates
All delegates who apply and meet the eligibility requirements will be incorporated into the program. However, a maximum of 15 delegates will receive compensation each month:
- If, in a given month, 15 or fewer delegates in the program qualify for any compensation (either solely the tier-based compensation system or also the contributor points system) all of them will receive the corresponding payment.
- If, in a given month, more than 15 delegates qualify for any compensation, the following criterion will be applied:
- Priority will be given to delegates who, in addition to qualifying for the Tiers system based in their Total Participation (TP), also have made extraordinary contributions and are eligible to receive compensation for Contributor Points (CP), and will be ranked based on their score for that CP parameter. After them, delegates who have only qualified for the Tiers system will be ranked based on their TP score. Each month, all participant delegates will be ranked as mentioned above, and the top 15 will receive compensation. This approach creates the right incentives for delegates to compete with one another and contribute more to the DAO.
- If a tie occurs for the 15th position between two or more delegates, priority will be given to the delegates who have cast the most votes in the last 6 months.
- In the event of the tie persist, priority will be decided by the date of the first vote that these participants cast, based on the end date of the vote in which the delegates participated, not the date when the vote was cast.
- In the event that the tie persists further, the final decision will favor the delegates who were first to present their delegation platform on the forum.
Incentive Budget
We propose that payments be denominated in USD and made in PSP/New VLR Token tokens. This aims to mitigate volatility that could cause:
- Unpredictable reductions that would discourage participation.
- Unexpected increases that could result in excessive payments, negatively impacting the treasury.
Compensation amount: Given the comparative analysis carried out when Cycle 1 was proposed and VeloraDAO’s own characteristics a treasury size, we propose to maintain a maximum of $2,500 per month, as this is adequate compensation to reward active and contributing VeloraDAO delegates.
Payment method - Vesting
In order to ensure commitment and skin in the game by delegates participating in the program, compensation will be paid on a monthly basis but with a 30-day vesting.
We suggest and encourage delegates to put the amount of rewards received into sePSP2 staking, which will benefit the protocol and the price of the token, as well as benefiting the delegate by receiving rewards in ETH and increasing their voting power.
Evaluation System for Delegates’ Feedback and Contributor Points
The Program Manager would be responsible for evaluating the different activities conducted by delegates, which goes beyond just feedback on proposals or topics, but includes other forms of participation that generate an impact, and the extraordinary contributions. The goal of this system is to:
- Incentivize quality over quantity.
- Extend the analysis across all contributions.
- Avoid unnecessary or spam comments made solely to achieve a higher score.
- Allow delegates to focus on contributing related to their areas of expertise.
- As a top-level expectation, incentivize delegates to go beyond their regular responsibilities by taking a proactive role and delivering high-impact, extraordinary contributions.
Evaluation Approach
The overall and comprehensive participation provided by the delegate throughout every month will be evaluated, based on their participation in various proposals, discussions and governance activities. The aim is to measure the consistency, quality and overall impact of their contributions. Based on that, the Program Manager will evaluate each delegate’s performance and score them on a monthly basis. The aim of the delegates participation should be to make valuable contributions, to foster debate, improve the proposal, or clarify issues not explicitly addressed within it, and promote the growth and success of the protocol.
Meaningless comments, opinions or participation that are intended to spam without generating a real and constructively contribution, positive feedback or criticisms or questions that aim to challenge or improve the proposals under discussion will not be considered.
Delegate Feedback Evaluation criteria
- Relevance: Analyzes whether the feedback throughout the month is relevant to the discussion.
- Depth of Analysis: It evaluates the depth of analysis provided concerning the proposals or discussions. This serves as a metric to assess whether the delegate takes the time to thoroughly meditate on the discussion and demonstrates attention to the details. Key elements include solid arguments, relevant questions, and thorough reasoning.
- Timing: Considers when the delegate provides feedback, rewarding those who provide feedback earlier, as long as they meet the above criteria. Note that feedback will be considered as provided before frozen period and voting.
- Clarity and Communication: This is a review of the clarity, structured communication, and overall readability.
- Impact on Decision-Making: While the proposer ultimately decides whether to incorporate feedback, high-quality feedback from a delegate often influences the final proposal that goes to vote.
- Strong involvement in a concrete debate: This analysis takes into account when the delegate is deeply involved in a particular debate or governance activity and makes a significant contribution or technical contribution given their skill.
- Presence in Discussions: This analysis reflect the effort of delegates who participate in most discussions.
- Make Proposals: Develop valuable proposals and actively incorporate the feedback received to refine and improve them.
- Other forms of participation: Other ways of engaging will also be analyzed, such as participation beyond merely attending Community Calls, being an active member and making concrete contributions, taking the initiative to make proposals, and, more broadly, the overall degree of participation in other aspects of governance.
Extraordinary Contributions Evaluation: To assess which delegates qualify for the Contributor Point system compensation, we will evaluate extraordinary contributions. These include, but are not limited to:
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Content Production: Creating high-quality content for marketing, educational or awareness purposes about Velora, in formats such as blog posts (Mirror/Medium), X (formerly Twitter) threads, YouTube/Twitch content, or other relevant social media. Content will be evaluated based on:
- Originality: Original content, not copied and pasted or generated by AI without significant human input.
- Clarity and Engagement: Easy to read, engaging, and avoid excessive technical jargon. Whenever possible, should include visual elements such as images, charts, or diagrams to enhance understanding and appeal.
- High Quality: Strong level of insight, structure, and polish, that demonstrate thoughtful analysis or storytelling.
- Accuracy: All facts, figures, and data referenced must be accurate and properly researched, without misinformation or unverifiable claims.
- Velora Focused: Centered around Velora.
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Engagement: Engagement-building activities that attract interest from the broader DeFi ecosystem towards Velora, community building, attract non-English language users, or onboard new users (e.g. hosting X Spaces, streamings, AMAs, diffusion activities, etc.).
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Promotion at events: Promoting Velora at ecosystem events, such as speaking in panels, running a booth, or conducting outreach initiatives.
Note: Delegates must not present themselves as representatives of Velora or VeloraDAO, but rather act in their individual capacity.
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Analytics and metrics: Developing analytics tools to collect, measure and process currently untracked but relevant protocol metrics, generating valuable data insights.
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Research: Conducting research in areas of strategic interest for the protocol—e.g., analysis of Velora’s competitive landscape, staking mechanisms, incentive systems, etc.
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Integrations: Promoting and achieving integrations with other protocols.
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Governance Impact: High-impact, quality contributions, such as submitting a meaningful, relevant and impactful proposal that is approved, providing strategic feedback that improves a proposal, promote a crucial and important debate in the DAO, etc.
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This list is not limiting.
Criteria for Evaluating Extraordinary Contributions:
- Quality: The level of accuracy and rigor of the contribution.
- Relevance: The degree to which the contribution aligns with the protocol’s needs and priorities.
- Impact: The measurable or perceived positive effect of the contribution.
- Workload and Effort: The estimated time and resources invested in producing the contribution.
- Engagement: The level of interaction and responsiveness with the users and stakeholders.
- Effectiveness: The degree to which the contribution achieves its intended objectives and produces tangible results.
To this end, the Program Manager will evaluate the delegates participation to assess which of them constitutes an extraordinary contribution, but also delegates who believe they have made such contributions can share in the forum in a thread that will be created specifically for this purpose, by the last day of each month, the proof of their public contribution and any details deemed appropriate.
Evaluation and Publicity: SEEDGov, as the Program Manager, will evaluate all these contributions to form the ‘Contributor Point’ and/or ‘Delegates’ Feedback parameter. Additionally, the provided evidence will be published in the monthly report for the entire community to be informed.
Engagement Evaluation Scale: We will assess delegate participation based on the depth and impact of their contributions, using the following increasing scale:
- Basic Participation
- Posting rationale for votes.
- Sharing simple supportive comments.
- Attending community calls.
- Intermediate Engagement
- Providing more elaborate feedback or thoughtful questions.
- Offering alternative perspectives or constructive criticism.
- Actively participating in community calls.
- Active Debate Participation
- Engaging in deeper discussions and back-and-forth debate with other community members.
- Contributing to broader debates on proposals or DAO strategy.
- Substantive Impact on Proposals
- Providing feedback or suggestions that directly lead to improvements or changes in a proposal’s content or direction.
- High-Level Contributions
- Creating or co-authoring relevant and impactful proposal that is approved.
- Promoting key debates that address critical or strategic issues.
- Taking initiative in shaping VeloraDAO’s future direction.
- Make extra-gov extraordinary contributions of quality and impact such as those mentioned above.
Monthly Evaluation Process
1. Data Collection: All the monthly contributions by each delegate is reviewed.
2. Overall Evaluation: The overall performance of the delegate will be evaluated, based on a holistic view of their participation.
3. Score Assignment:
- Delegate Feedback: A level of 0 to 10 is assigned to each delegate for the Delegate Feedback parameter
- Contributor Point: If it corresponds, a level of 1 to 5 is assigned for the Contributor Point parameter, based on the consistency and quality of the extraordinary contributions over the month. When two or more delegates jointly carry out an extraordinary contribution, the CPs will be awarded among them according to the task distribution, scope of work, and overall execution. Participating delegates are expected to provide the necessary information to ensure fair distribution.
4. Monthly Report: The delegate’s performance over the month will then be reported and the delegate’s contributions are evaluated.
Details: Terminology, Symbols, and Formulas
- Delegate compensation system:
- Activity Weight (%): Represents the weight assigned to each key activity to be measured in delegates.
- Participation Rate - 90 days (PR90) - Weight 30: Percentage of the total participation of the member in votes in the last 90 days. This parameter will be calculated at the end of each month.
- PR90% fórmula: (PR90 * 30) / 100
- Snapshot Voting (SV) - Weight 30: Percentage of delegate participation in voting. This parameter will reset at the beginning of each month.
- Tn: Number of total proposals sent to Snapshot for monthly voting.
- Rn: Number of proposals the delegate voted in the month.
- SV% formula: (SV(Rn) / SV(Tn)) * 30
- Communicating Rationale (CR) - Weight 25: Percentage of communication threads with the justification of the delegate’s vote on the proposals sent to Snapshot. To encourage timely and proper communication, only rationales within seven days after the end of each vote will be counted. This parameter is reset at the beginning of each month.
- Tn: Total number of proposals that were submitted to a vote.
- Rn: Number of honest communication rational threads where the delegate communicated and justified their decision within 7 days after the end of each vote.
- CR% formula: (CR(Rn) / CR(Tn)) * 25
- Delegates’ Feedback (DF) - Weight 15: Score given by the Program Manager regarding the feedback and overall participation provided by the delegate during the month.
- The scoring system will use the following formula:
- Total Participation (TP): Sum of the results of activities performed by the delegate. A TP% of 100 indicates full participation.
- TP% formula: PR% + SV% + CR% + DF%
- Payment USD (PUSD): The final amount of USD in PSP tokens that the delegate will receive in each month is based on his TP% and his Tier.
- Tier 4: TP ≥ 70% and < 85%. Compensation: $750.
- Tier 3: TP ≥ 85% and < 90%. Compensation: $1,000.
- Tier 2: TP ≥ 90% and < 95%. Compensation: $1,250.
- Tier 1: TP ≥ 95%. Compensation: $1,500.
- Extraordinary contribution compensation system:
- Contributor Point (CP): A level of 1 to 5 will be given by the Program Manager for extraordinary contributions made by the delegate during the month, applicable only to delegates who qualify for any of the above-mentioned tiers:
- Activity Weight (%)
- Contributor Point (CP) - Weight 100% (from 1 to 5 points)
- Payment USD (PUSD): The final amount of USD in PSP tokens that the delegate will receive in each month is based on this CP scale and points:
- 1–2: Regular Contribution. Compensation: 1 CP: $200 - 2 CP: $400.
- 3–4: Significant Contribution. Compensation: 3 CP: $600 - 4 CP: $800.
- 5: Exceptional Contribution. Compensation: 1 CP: $1,000.
- Activity Weight (%)
- Contributor Point (CP): A level of 1 to 5 will be given by the Program Manager for extraordinary contributions made by the delegate during the month, applicable only to delegates who qualify for any of the above-mentioned tiers:
Both systems are independent but may overlap. Delegates who qualify for the tier system will receive the corresponding compensation, and those who also meet the requirements to qualify for the Contributor Points system will receive both compensations based on their participation parameters in each.
Parameter summary
Delegate Compensation System:
Activity Weight (%):
- Participation Rate 90 (PR90) - Weight 30%
- Snapshot Voting (SV) - Weight 30%
- Communicating Rationale (CR) - Weight 25%
- Delegates’ Feedback (DF) - Weight 15%
- Total Participation (TP):
- TP = PR% + SV% + CR% + DF%
Extraordinary Contribution Compensation System:
Activity Weight (%):
- Contributor Point (CP) - Weight 100% (from 1 to 5 points)
The percentages and calculation method for the Activity Weight, Tiers set and Contributor Points in the following proposal, as well as the inclusion of a new parameter or tier, will be subject to modifications, adjustment and improvements by the DAO and/or Program Manager based on experience as the program progresses. The goal of this is to adjust the parameters of the program to reach the optimal level of professionalisation and engagement of the participants, to raise the quality standards to the desired minimum, and to incentivize delegates to engage in more and higher quality activities.
Administrative Budget
In this Cycle 2, and given our role as GTF, we also we do not propose allocate any extra operational budget to administering this Program.
Program Manager Details:
- SEEDGov offers and proposes to be the Program Manager of this second cycle.
Responsibilities
- Check corresponding data to see delegates’ eligibility.
- Monitor and evaluate the overall performance and activity of each delegate.
- Review delegate comments in the forum and filter out spam messages.
- Support delegates with any questions or concerns related to the program.
- Collect feedback to improve the program.
- Analyze the progress of the program and if necessary implement modifications, adjustment and improvements.
- Communicate any changes in the program.
- Publish monthly results about each delegate performance.
- Publish monthly program costs in the forum.
Deliverables
- Monthly results of the program.
- Record of all extraordinary contributions made during the program, serving as precedent.
- Public cost reports to allow for audits by any interested party.
- Final evaluation reports of the program.
Additional
- Constantly work on improvements to the program.
Self-exclusion from receiving rewards for transparency and conflict of interests
As SEEDGov acting as GTF and Program Managers, our responsibilities include evaluating delegates’ performance, which impacts their rewards. To ensure transparency and avoid a conflict of interest, we will continue as Velora delegates but exclude ourselves from participating in the VCP
Final Evaluation
Prior to the 6 month due date, results and impact of the program will be presented in order for the DAO to assess it’s renewal, deprecation or modification.
KPIs
- Achieve an average Total Participation (TP) of 80% among participants in the program within six months.
- Achieve extraordinary, meaningful and high-impact contributions from some delegates that generate real and tangible value for the protocol.
- Increase or at least maintain the current number of active delegates and expand the quality of debate, plurality of voices and offer tokenholders different delegates to delegate their VP according to their vision and expected quality of participation.
Next steps
- Proposal discussion and feedback
- Snapshot vote - if approved:
- Application period - 7 days: Although any delegate willing to participate in the DAO may present itself freely in the forum, to the ends of this Delegate Program Cycle 2 only delegates who meet the participation requirements and apply within the 7 day period will be considered.
- Velora Contributor Program Start: September 1, 2025.
- Velora Contributor Program End: February 28, 2026.
- Metrics monitoring timeframe: 6 months.
- Final impact report: 15 days prior the Program End.
Means
This proposal does not requires to come to life any additional product o development, and does not modify any code of the protocol, so no audits are required.
Implementation Overview
We do not foresee any potential negative outcome and it is not expected for the DAO to derive any associated implementation action. The duration of the proposal will be of 6 months since it’s approval.
Time of Implementation
The duration of the program is 6 months.
The reports to be delivered, their content and KPIs have been detailed in the sections ‘Responsibilities & Deliverables’, ‘Final Evaluation’ and ‘KPIs’ above.
Budget
The proposal requires a maximum budget of 225,000 USD in PSP tokens - or in the future new token it may eventually migrate to in accordance with Project Miro - for a 6-month period (up to 2,500 USD per each of the 15 eligible delegates per month during the 6 months of the program).
It should be noted that this is the maximum possible budget, although it is highly unlikely that all 15 incentivized delegates will qualify for Tier 1 and top Contributor Points every month. Therefore, it is expected that the final budget will be considerably lower, as was the case with Cycle 1.
- USD costs are fixed, meaning that if the price of PSP increases, the USD costs will remain the same.
The corresponding transfers to each delegate will be made on a monthly basis, according to the monthly report to be published on the forum by the Program Manager.
Risk Assessment
We do not understand that the proposal has cons, and the pros and positive impact on the rest of the community, the ecosystem and the protocol, as indicated, are:
- Encourage active participation in Velora governance.
- Seek to increase both the quantity and quality of participation and enhance diversity of voices.
- Allowed tokenholders who are unable or unwilling to actively participate in governance to delegate their voting power to active delegates aligned with their vision, promoting a more balanced distribution of voting power.
- Encourage more significant contributions.
