Everyday life is filled with problems. Lenders are insolvent, dollars are inflating, and the very foundation of web3 is being ridiculed by some of the world’s biggest leaders. But while Crypto Twitter is more bearish than ever, builders across the ecosystem are still heads down creating the future. There is noise in the signal if you listen closely enough.
For example, classical election systems are opaque and ripe with controversy, but individuals and institutions are actively designing digitally native governance that remedies many of these problems. Blockchains are the free market’s ultimate sandbox, and while none of these novel economic or governance protocols have scaled to a trillion dollars or a billion users, progress is certainly abound. Lots is left to be done, but we’re to help.
What is Pitch?
Pitch is a DAO that builds governance and economic infrastructure for web3. We have become one of the space’s biggest liquidity incentive platforms in web3 since our February 2022 debut, processing millions of dollars of rewards for the FXS and CRV ecosystems.
Our flagship product, Pitch.Money, is a generalized marketplace for vote incentives. Dozens of protocols across crypto are designed so their token holders actively decide token emissions, deeply intertwining their economics with their governance. However, while bountiful mechanisms exist for economic efficiency within crypto assets, few to none exist for governance. This creates systemic vulnerabilities within the greater community that must be remediated for web3 to scale.
So, today, we are taking the protocol one step further.
Capital Efficiency and Price Discovery
At this point, a reader well-versed in decentralized finance is probably thinking:
“But ser, what about bribe.crv.finance? Protocols who want deep liquidity on their token can incentivize it there. Doesn’t that solve this problem?”
The problem, as always, is capital inefficiency, which occurs here in two meaningful ways.
First, protocols who wish to lobby have no guarantee that their money will translate into votes, and voters have no guarantee that their support will translate into meaningful—let alone optimal—returns. As a reminder, these votes have measurable value because they control a token’s emission schedule. For example, things can go wrong if protocol XYZ lobbies $100k on a gauge that ends the epoch with 0 votes. They’ve effectively burned money. On the other hand, they may spend $100k and earn $500k worth of emissions, short-changing the governance community from its fair share.
We’ve designed “elastic rewards” as a mechanism to solve that problem. With Pitch, protocols can specify the precise dollar amount that they’ll pay per vote. If they end with 0 votes, then they pay $0, and if they end with 100 votes, then they’ll pay 100 * x, where x is their price per vote. This de-risks protocols from participating in governance economies by optimizing their ROI. More importantly, it facilitates precise price discovery around the cost of voting, and governance should become increasingly efficient as the market grows more liquid.
The second problem with the original scenario is slightly more nuanced, but it’s a pain point that anyone who’s participated in the Curve wars deeply understands. Let’s explain from the perspective of protocol XYZ who desires deep liquidity on their XYZ stablecoin.
Well, we want Curve liquidity, so let’s incentivize veCRV votes through the OG bribe.crv.finance. But wait: half of Curve’s token supply is owned by another DAO, Convex, so only using bribe.crv.finance misses half the electorate.
No worries - we can just incentivize Convex too, but that requires another platform, Votium, with its own thriving governance ecosystem. Ok, let’s pay money to both then. But how much capital should we allocate to each platform? Well, it depends on how much Convex has.
Also, since Convex owns a ton of veCRV, they can technically claim part of our bribe.crv.finance capital as well. Need to factor that in. And we can’t forget about Yearn, another independent large veCRV holder.
Ah, let’s just figure this out after the new Arthur Hayes article.
The whole scenario above could be solved, of course, with a reward router. Similar to how 1INCH optimally allocates orders across DEX liquidity, Pitch could optimally route vote incentives across protocol governance. And we’re excited to announce that this feature is officially live for the Curve ecosystem voters. This means that protocols can use Pitch as their one-stop shop for capital efficient orders in the Curve wars. There’s no longer a need to do the math on an optimal incentive distribution between CRV and CVX voters. Additionally, this functionality is fully generalized to support other protocols as the governance economy continues to mature across web3.
Vote and Chill
Before our latest update, voters were required to claim their vote rewards weekly – no longer, thanks to cutting-edge cryptography. We’re now using Merkle trees to store vote history over time, posting the root on-chain and the entire tree on our public resources as a method of bookkeeping rewards. Users can now vote and chill for as long as they want before claiming rewards.
Governance Never Looked So Good
Dark mode, slight greens, and deep purples all adorn our new UX, updated with state of the art optimizations for browser performance and responsiveness. We’re planning many more releases in the near future, and we’re excited to release our new site, Pitch.Foundation as an overview for the DAO. Stay tuned for details about our programmable governance wrappers (pitchXYZ) and their respective auto-compounders.
The tools of digital democracy are being built before our eyes.