Thread by @Minty0x

Want Exposure to the Arbitrum Ecosystem but don’t know where to start?

@PlutusDAO_io aims to be the Convex of Arbitrum by Controlling Voting power on Major protocols.

How does it work? Let’s take a Deep Dive into Plutus DAO and $PLS.

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1/ Brief Terminology

- $PLS: The Native Governance Token of Plutus
- $lPLS: Locked PLS that will accrue Bribes, multiplier points, boosting power, & more
- PLV: Auto Compounded vault strategies for assets like GLP & GMX

2/ What is @PlutusDAO_io?

Plutus is a governance aggregator and auto compounding vault creator for notable Arbitrum Protocols such as @dopex_io. Plutus already controls the majority of DPX voting power and has expanded to other protocols like @SperaxUSD and @GMX_IO.

3/ With Plutus, you can exchange any supported token such as $SPA for $plsSPA, which is the Plutus derivative of the token. After, you can stake your token to earn extra yield similar to if your native tokens were max locked without needing to lock your tokens.

4/ While you cannot convert your pls Tokens back directly, the protocol incentivizes liquidity between the native token and pls derivative so that you can exchange your token back through the supported AMM.

5/ The protocol also offers auto compounded vaults for assets like $GLP for users who want extra yield. If you are a $GLP holder, you can convert your GLP to plvGLP and stake it in the farm to earn autocompounded rewards. plvGLP can be converted back to GLP with a 2% Exit fee.

6/ Since plvGLP auto compounds the GLP rewards, there is an interesting use case for protocols. Recently, @LodestarFinance announced that they will be accepting plvGLP as collateral for holders to borrow against.

https://twitter.com/1486722738349752337/status/1578418979332161543

7/ If plvGLP works properly and accrues value faster than any potential value loss from GLP, the Loan to Value of your loan could diminish over time.

8/ To expand on this, Plutus recently announced that a plvGMX vault was in development as well in a Recent Twitter Spaces. Imagine being able to auto compound your real yield from $GMX rewards.

https://twitter.com/arbitrum/status/1582438209513918464

9/ This GMX-PLS collaboration becomes significant when you realize that Plutus successfully passed a proposal in the GMX forums to conduct a $200k OTC treasury swap of locked $PLS for esGMX that would be used to incentivize plsGLP & plsGMX holders.

https://twitter.com/1486722738349752337/status/1570828860161392640

10/ Tokenomics

The nice thing about $PLS tokenomics is that the distribution isn’t skewed towards private investors. Most of the token distribution goes to platform rewards and liquidity mining which you can see here which is fair for growth.

11/ Recently, Plutus also announced that they are updating their tokenomics and introducing locked $PLS (lPLS), which you can receive for locking PLS through a 16 week cycle. In return, IPLS holders will receive bribe rewards, multiplier points, and Escrowed PLS (esPLS).

12/ This is a step forward from the early bootstrapping efforts of Plutus. Aligning incentives to the goals of the protocol is important, and I think it is smart that Plutus is taking directly from the Convex playbook in creating their locked PLS efforts.

13/ The Plutus Vision

While I originally thought that Plutus was just focused on the Dopex Ecosystem, the recent plvGLP vault and plsSPA vault show that Plutus could be the governance blackhole of Arbitrum.

14/ If Plutus can accrue a governance majority in major Arbitrum protocols where voting is valuable, Plutus could become the Convex of Arbitrum.

15/ For example, Sperax is a yield automator with their own stablecoin called $USDs. The protocol recently launched a no code liquidity program called #Demeter, where projects can pair their token with USDs using Sperax contracts and allow users to provide LP and farm emissions.

16/ The reward ratio for each pool will be dependent on $SPA gauges similar to Curve. Now PlutusDAO launches the plsSPA pool, sucks in $SPA, and locks it for the max time for the best voting rewards.

https://twitter.com/1486722738349752337/status/1581027366465286145

17/ Protocols that want the votes could bribe $PLS holders directly, and the revenue could be distributed directly to users who lock their PLS.

18/ Risks

Before you lock your tokens with Plutus, you should always take note of any risks. There is no such thing as free yield.

19/ First, you add more smart contract risk when using Plutus on top of your assets. Plutus has audited their new vaults, but that does not guarantee anything. Please do your own diligence and assess your risk tolerance.

20/ The other risk is in regard to liquidity between native tokens and the pls derivative of the token. The LP is incentivized, and arbitrageurs help keep the pool balanced, but if there is a mass exit of pls assets that could drain the pool and make it hard to swap back.

21/ For $PLS lockers, the protocol is still new and is subsidizing bribe revenue with pls assets. Plutus is betting that future bribe revenue will be enough to curb incentives and emissions, but we will have to wait and see.

22/ In Conclusion, I think that @PlutusDAO_io is an early project that has strong potential and a good team behind it. It still has a ways to go in establishing the Arbitrum bribe economy, but the core products are compelling, and I like the direction that Plutus is going in.

If you enjoyed this thread, a Like, Follow, & Retweet helps out a lot!

Disclosure: I do not own any PLS, but I will be keeping an eye on it.

This thread is for entertainment purposes only. Not Financial Advice.

Special Mentions

@PlutusDAO_io
@arbitrum
@SperaxUSD
@LodestarFinance
@systems_value
@dLuxGMI
@DAdvisoor
@crypto_linn
@CryptoDragonite
@CadmusBenedict
@0x_d24
@ClBlockchain
@DeFiSurfer808
@ethersole
@hanjaycrypto
@PhilippInvest
@LouisCooper_

https://twitter.com/Minty0x/status/1583113704685518848