Yield for NFT Holders

Summary

As a value proposition for NFT holders and a baseline for future token holders, I propose drafting ideas around creating yield for Lightning OG NFT holders.

Concept

Create a set of premium vaults that NFT holders will only have access to. We can call these Vault X or Vault 00. The interest from the Vault X segment will be used to generate yield for NFT holders.

Vault Strategies

  1. Arbitrage Vault- This vault utilizes bots that scout and execute on arbitrage opportunities from AMM pairs on DEXs.

  2. Trading Vault- This vault utilizes bots that trade base on the Kelly Criterion principle of micro position size and probabilities.

  3. Existing Vaults- CC, CSP and others to come can be used. These can either be complementary to the two above or just be the main earning infrastructures.

Vault Seeding

To be discussed

Plan of Execution

If Vault 1 or 2 are preferred then contributors will be needed to develop, test and code. If existing vaults are decided upon then it becomes a matter of how to gather the funds to seed the vaults.

Pros and Cons Note: To be updated

Arbitrage Vault: Cons: Require contribution to development
Pros: Automated

Trading Vault: Cons: Profitability concern; require contribution to development
Pros: Automated

Existing Vaults: Cons: May require active management
Pros: Infrastructure already present

Contributors
Azrangar- I can contribute to crafting of the trading strategies.
@msquaredSA indicated he is willing contribute to the coding

Next Steps

  1. Seek commentary
  2. Discussion with wielders and devs/council members
  3. If Volts 1 & 2 are desired:
    3a) Seek more contributors
    3b) Draft trading strategies
    3c) Code
    3d) Test
    3e) Publish results for discussion
  1. Lending Strategy Vault- This involves depositing stable coin in a lend/borrow protocol such as Solend or Larix. During a bullish momentum, the strategy would borrow for example USDC against USDC. The borrowed USDC is used to purchase SOL. When SOL rises, it is sold and the USDC is repaid and the net is profit. In a bearish momentum, SOL is borrowed against USDC and sold for USDC. When SOL drops, it is bought back and loan is repaid and the net is profit.