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1. Background

Currently, esINIT positions granted through VIP can be vested/unlocked in one of two ways:

• Maintain the minimum score required for 52 weeks (equivalent to 26 VIP epochs)
• Provide liquidity into any Enshrined Liquidity (EL) pair and have the receipt token lock-staked for 26 weeks (equivalent to 13 VIP epochs)

1. Background

Currently, esINIT positions granted through VIP can be vested/unlocked in one of two ways:

• Maintain the minimum score required for 52 weeks (equivalent to 26 VIP epochs)
• Provide liquidity into any Enshrined Liquidity (EL) pair and have the receipt token lock-staked for 26 weeks (equivalent to 13 VIP epochs)

This proposal seeks to increase the minimum lock-stake period from 26 weeks to 52 to align with the first option.

Note that this proposal does not affect positions that have already been zapped and lock-staked nor vanilla staking within Initia's Enshrined Liquidity system.

2. Parameter Changes

3. Rationale & Impact

There is a misalignment amongst the two vesting options described above. A summary of the pros & cons of each vesting option and commentary is provided below.

1. esINIT Vesting

   1. Need to maintain activity and usage of rollup apps over a period of 52 weeks. Failure to maintain on-chain activity as defined by the user’s score results in slashed esINIT allocation.
   2. Does not require any additional capital.

2. esINIT Zapping

   1. No requirements around continued usage of the L2 apps.

3. Rationale & Impact

There is a misalignment amongst the two vesting options described above. A summary of the pros & cons of each vesting option and commentary is provided below.

1. esINIT Vesting

   1. Need to maintain activity and usage of rollup apps over a period of 52 weeks. Failure to maintain on-chain activity as defined by the user’s score results in slashed esINIT allocation.
   2. Does not require any additional capital.

2. esINIT Zapping

   1. No requirements around continued usage of the L2 apps.
   2. Requires additional capital. However, only a relatively small amount (20% of the LP position) is needed as 80% of the the INIT-USDC pool (currently the only EL pool) position is INIT.
   3. The amount of INIT at the end of the lock period is subject to impermanent loss. However, this is quite minor compared to normal DEXes due to the high INIT ratio.
   4. Zapped positions can be staked with validators to earn staking rewards (currently ~150% APR) and trading fees ($13.19M 24-hour trading volume on $33.27M of capital equating to ~144% APR).
   5. Zapped positions are also eligible to vote in VIP gauges (and potentially receive off-chain voting incentives).
   6. After 26 weeks, the LP can be withdrawn and the INIT can be immediately used anywhere within the ecosystem or elsewhere (ex. can move the unlocked INITs to VIP-enabled L2s to further earn VIP incentives).

Governance Votes

• YES – You support increasing the minimum VIP Zap Lock-Staking duration from 26 weeks to 52 weeks
• NO – You do not support increasing the minimum VIP Zap Lock-Staking duration for from 26 weeks to 52 weeks
• NO WITH VETO – You believe this proposal is harmful, spam, or violates governance principles.
• ABSTAIN – You choose not to vote for or against but wish your vote to count toward quorum.