PIP-128: Signaling Vote to Direct Paloma Foundation to Mint 500MM PalomaUSD (PUSD) for User Onboarding

Governance
1

Proposal: PIP-128: Signaling Vote to Direct Paloma Foundation to Mint 500MM PalomaUSD (PUSD) for User Onboarding

Status: Proposed

Author(s): BoweryKing

Type: PalomaUSD Minting Proposal

Discussions-to: Governance - Paloma

Created: 02/27/2025

Simple Summary

Paloma mainnet is now celebrating 2 years without a major user-onboarding event. This is a signaling vote to the Paloma Foundation to mint 500,000,000 Paloma(PUSD) tokens that will be used to incentivize traders and creators to support the launch of Paloma’s Got Talent and PalomaDEX trading launchpad for talent-ai tokens. This community approval is required to mint these tokens. If the community does not vote to approve this proposal, and PUSD tokens are not minted, Paloma has no path to immediately incentivize creators and traders to join its blockchain with a goal to use Paloma and generate fees for validators and stakers. GRAIN holders who want to see GRAIN price appreciate from increased chain usage are encouraged to vote for this proposal.

Abstract

The Paloma Protocol is getting ready to onboard creators and traders to Paloma’s Got Talent launchpad. To launch the platform, the Paloma foundation wants to incentivize creators, and traders, outside of web3 to launch and trade Paloma Talent-AI tokens on the Paloma protocol. To incentivize user participation, the Paloma Foundation needs to create incentives for these users to join the network.

The Volume Team proposes that the Paloma Foundation mint 500,000,000 Paloma(PUSD) tokens in one mint action for incentives. These tokens will be given to creators and traders over the period of the year as an incentive to launch and trade tokens in the market. The PUSD incentive will create trading volumes and price action both on Paloms’ Got Talent bonding Curve and the decentralized exchange, PalomaDEX.

Any recipients of PalomaUSD will not be able to redeem these tokens unless they use Paloma’s PalomaUSD manager to redeem for USDT on the target EVM chains that Paloma supports. USDT redemption will require that users have 500,000 PUSD minimum to redeem and that there is sufficient USDT to redeem tokens. The Paloma Got Talent incentives program will aim to provide incentives for traders to trade as well as deposit USDT into the Palom stablecoin manager. Thus, for every $1.00 in incentives, Paloma will aim to secure at least 1.50 in USDT deposits for redemptions. In this way, PalomaUSD will become a fully backed stablecoin as more incentives are consumed.

Motivation

Paloma wants to provide compelling applications on its protocol that will attract thousands of users to Paloma in 2025. Paloma will need to compete0 with other blockchains and applications that are prepared to spend marketing dollars of upwards of $300 per trading user. The Paloma Foundation does not yet have a listing for Paloma’s GRAIN/USD pair on Palomadex that will allow it to sell GRAINs to fund advertising and marketing. As such, we urge the community to signal a yes vote for the Paloma Foundation to print PalomaUSD and use that as marketing dollars to attract users to the Paloma blockchain.

Technical Specification

In order to maintain stability of the peg of PalomaUSD to USDT, we propose that the Paloma Foundation conduct a one-time mint of 500,000,000 PalomaUSD tokens. Once minted, the Foundation will create a stable-backed tracking page for the community to see

Minting

  1. Paloma Foundation will execute one-time mint of 500,000,000 PalomaUSD (PUSD) tokens.

Incentives

  1. Minted PUSD tokens will only be used as incentives to traders and creators in the following campaigns designs that may be an example of incentives:
    1. Creators: Receive $25 to launch tokens for trading on Paloma Chain and when the token achieves at least $1,000 in trading volume
    2. Creators: Receive $25 for each additional $20,000 in trading volume up to $100.
    3. Traders: Receive $50 to trade tokens on Paloma’s Got Talent Bonding Curve and Dex
    4. Traders: Receive $100 for each additional $2,000 USDT deposited and traded
    5. Traders: Receive 1% Discounted trading fee when their wallet portfolio has surpassed $10,000 in value.
  2. It is the plan for the Paloma Foundation to use at least 5,000,00 PUSD as incentives to launch Paloma’s Got Talent and PalomaDEX AI Talent tokens from March 1 - May 31, 2025.

Burning

  1. PalomaUSD (PUSD) is burned from the original mint as PUSD is recovered from Trading Fees on the Paloma Bonding Curve and PalomaDex. Paloma will collect 30% of all Paloma Got Talent Pair trading fees for all transactions. Paloma Foundation will collect all feels from PalomaDEX non Bonding Curve trading pairs. Those trading fees will be converted to PalomaUSD and burned to remove excess PalomaUSD from circulation and to bring PUSD into stable peg with USDT.

Risks

There are risks for bootstrapping a stablecoin with an initial issuance the token without the backing asset. Risks include the following:

  • User frustration that they are unable to redeem PUSD for USDT on the target EVM chains, even with the minimum $500K balance, because Paloma has not collected enough USDT deposits from traders activity fees to support redemption.
  • Lack of confidence in PUSD as a true stablecoin may lead to loss of interest for use as a medium of exchange on the Paloma network as well as loss of possible peg on target chains.

It is our view that PUSD must start with a function to bring users to Paloma. Thus, the risk of the lack of confidence in PUSD as a true dollar stable is accepted if PUSD can bring users to Paloma to trade, without the need to sell GRAIN tokens from the Paloma Foundation’s treasury.

The Signaling Vote Proposal: Pip-128.json

{
    "title": "PIP-128: Signaling Vote to Direct Paloma Foundation to Mint 500MM PalomaUSD (PUSD) for User Onboarding",
    "summary": "This is a signaling vote to the Paloma Foundation mint 500M PUSD to incentivize traders and creators to support the launch of Paloma’s Got Talent and PalomaDEX",
    "type": "Text",
    "deposit": "10000000ugrain",
    "metadata": "ipfs://QmfPTo6ofo9Pcdoam19QFFrMopazeNASLcYayv642o1qXV"
}

The Signaling Vote Metadata: Pip-128_metadata.json

{
    "title": "PSignaling Vote to Direct Paloma Foundation to Mint 500MM PalomaUSD (PUSD) to Incentivize User Onboarding",",
    "authors": [
     "BoweryKing"
    ],
    "summary": "This is a signaling vote to the Paloma Foundation mint 500M PUSD to incentivize traders and creators to support the launch of Paloma’s Got Talent and PalomaDEX",
    "proposal_forum_url": "https://forum.palomachain.com/c/governance/6",
    "vote_option_context": "Vote YES to support the vote to signal the minting of 500M PUSD to be used as incentives"
}

The Signaling Vote CLI Command

palomad tx gov submit proposal
–gas auto
–node=https://rpc-1.paloma.nodes.guru/
–chain-id tumbler
–from
-y

How to Vote on Proposals 185

**Paloma Client:**
palomad tx gov vote 185 yes \
--chain-id tumbler \
--from <Your Paloma Address> \
--node <Your node> \
-y

**Paloma LightNode Users of V2 Only:**
1. Windows
docker run --rm --pull=always -ti -v $env:USERPROFILE\paloma-lightnode\.paloma:/root/.paloma palomachain/lightnode-client:v2 vote-proposal 185 yes

1. Mac, Linux & VPS
sh $HOME/Downloads/setup.sh vote-proposal 185 yes

Rationals

Paloma mainnet is now celebrating 2 years without a major user-onboarding event. The Paloma community of GRAIN token holders want rapid onboarding of new users. Without users, GRAIN value will not increase and the protocol will remain stagnant. Creating a stablecoin that will be used to create incentives for onboarding is as similar to many points reward systems already in place by protocol teams. However, unlike points which require an airdrop, minted PUSD will be immediately air-dropped to new users of Paloma to engage with the blockchain protocol’s first applications.

The Paloma Foundation desires to encourage usage of the Paloma’s Got Talent launchpad and PalomaDex. As such it wants to fast track user onboarding to create an active community of creators and traders.

Paloma wants to be the fastest relay chain in the world with the most decentralized network of validators that can attest to any transaction with the fastest possible execution. Paloma aims to make it easy for developers to control smart contracts on any Solana, Ethereum L1, L2, and L3 chain.

To learn more about Paloma, please visit https://palomachain.com

To follow the project on Github, please star the project GitHub - palomachain/paloma: The fast blockchain messenger protocol

To participate in the community, please join the Paloma Discord: Paloma