An ERC20 token which entitles the holder to recurring, perpetual rewards as long as a specific condition or KPI is true. An essential tool for the DAO toolbox, enabling continuous incentivization towards common goals.

<aside> 🔥 Built on Superfluid’s IDA + UMA’s Optimistic Oracle.

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Example:

• Project wants to incentivize community evangelists to improve its twitter presence.
• Metric used is week over week growth in twitter followers
• Protocol creates PCR tokens and distributes them to members of its community
• If growth is > 5%, rewards are transferred to PCR holders. Growth rate is checked every 12 hours.
• Process is: Anyone can submit a bonded proposal on if growth rate is over 5%. This proposal then sits through a “liveness” period, where anyone else can also submit a bonded dispute of the proposed answer.
• If proposed value is not disputed during liveness and the value was that yes growth was above 5%, IDA transfer is initiated to all PCR holders

Background on UMA

KPI options are a tool built by UMA, which allows projects to create and distribute tokens which entitle the holder to a proportional reward when a specific condition is met. For example: create and distribute 100 KPI options. Each unit can be redeemed for 1 USDC when Superfluid has >1000 users.

However, for many KPIs, DAOs have expressed the need that the relevant metric should not only be reached, but maintained over time. In order for KPI options to be a tool for continuous community incentivization, there needs to be a way to scalably distribute recurring rewards.

• UMA’s optimistic oracle process:

Background on Superfluid

Superfluid’s IDA is a powerful feature built into Super Tokens, which allows distribution of funds to any number of recipients at a fixed gas cost regardless of # of receivers, following a pre-defined set of weightings called “units”. By tokenizing these “units” into a simple ERC20 token, we can create a composable asset which entitles the bearer to recurring rewards with (almost) no additional interactions required.

Technical description

The KPI Tokens will be ERC20 tokens with built-in IDA units (Rewards Distribution Token). A KPI Reporter will periodically evaluate the conditions, and if they are met will submit a bonded request to the UMA Optimistic Oracle. If there are no disputes, after the liveness period a distribution will occur.

The KPI tokens have built-in IDA units, which are transferred when the token is transferred. This means that simply by holding the tokens, users will be able to receive rewards straight into their wallets. Rewards can be distributed in any Super Token. Technically, it could also be in multiple Super Tokens, although this would increase gas costs and complexity. Either way, the supported Super Token for rewards must be decided at time of deployment.