$PUFFER Season 2 Update: FAQs
As $PUFFER enters its season 2 update, we have added new features and mechanisms to improve governance, engagement, and the community. Therefore we wanted to take the opportunity to break down some key points around Puffer DAO, vePUFFER, and the CARROT rewards based on our latest updates.
Let’s start by going over some of the key terms.
Key Terms
What is the Season 2 update?
Season 2 update introduces a revolutionary community-drive rewards system where the Puffer community directly influences how incentives are distributed to grow the Puffer ecosystem.
The biggest change is Puffer Points are moving on-chain, that’s right, incentives will now be paid out in CARROT an ERC-20 token that rewards activities like staking, voting, and liquidity provisioning.
On-chain advantages
What advantages does this unlock? Firstly, it eliminates the point dilution from Season 1, Additionally, CARROT will also be tradeable, with an initial liquidity pool deployed after launch. On-chain rewards offer greater transparency for our users and pave the way for potential DeFi integrations, providing additional yield opportunities to stack even greater rewards.
What is a gauge?
A gauge is like a “rewards bucket” assigned to a specific protocol or liquidity provider. Think of it as a measuring tool determining how much of the bi-weekly CARROT rewards should flow to each participant based on community votes.
Why would I want a gauge?
If you’re contributing value to the Puffer ecosystem, e.g. providing liquidity, building integrations, etc a gauge allows you to receive rewards based on community support.
What is the $CARROT tokenomics?
The total supply of CARROT tokens is capped at 100 million, with dynamic bi-weekly emissions based on the community-voted governance gauges. Rewards get allocated proportionally to gauge support.
$CARROT Rewards
What is the $CARROT token, and how does it work with Puffer Points in Season 2?
$CARROT is an ERC-20 token replacing off-chain Puffer Points in Season 2. Earned via staking, liquidity, and gauge voting, $CARROT will convert to $PUFFER tokens at a set rate after Season 2.
How are $CARROT rewards claimed, and what is the 30-day cliff period?
$CARROT rewards are claimable anytime during the reward epoch or up to one year after Season 2. Claimed tokens have a 30-day lock period before withdrawal, with each claim resetting the timer.
What are the gauges when the first voting epoch launches?
For users familiar with Season 1, our existing partners (Curve, Uniswap, Pendle, etc) will be part of the first voting epoch. New protocol integrations will go through our governance process before and added in later epochs. With pufETH holders and stakers and vePUFFER holders who take part in the voting epoch, will all be eligible for $CARROT rewards as well.
What is the $CARROT tokens rewards distribution mechanism?
Community governance and gauge voting drive the $CARROT token rewards distribution mechanism. vePUFFER holders participate in bi-weekly voting to allocate voting power to specific gauges, such as liquidity pools or protocol integrations. After the conclusion of the voting epoch, the reward epoch starts where vePUFFER holders, pufETH holders, and liquidity providers can claim their $CARROT tokens (with a 30-day vesting cliff) these rewards will be proportionally distributed based on how the voting power is allocated.
Is there any plan to have any DeFi integration for $CARROT? Where is the initial pool deployed?
The initial liquidity pool will be deployed on Uniswap v2 after the Season 2 update launch, as for DeFi integrations, the answer is yes we have some in the works, so stay tuned for updates.
What is the pre-CARROT transition?
The pre-CARROT transition ensures a smooth shift from off-chain points to on-chain rewards in the Season 2 update. During this phase, a snapshot will be taken of all Puffer Points earned between October 5, 2024, and January 31, 2025, which are calculated linearly. More announcements will be coming out next week.
Governance and Voting
How do I participate in the governance of PufferDAO, and what is the role of vePUFFER NFTs?
Stake PUFFER tokens to receive vePUFFER NFTs for up to 2x voting power over 24 months, enabling participation in governance proposals and CARROT reward allocation via gauges to align with community priorities.
What are the key staking requirements for Governance and voting eligibility?
To vote, stake PUFFER tokens at least 72 hours before the voting epoch begins, as vePUFFER voting power activates after a 72-hour warm-up period.
How does governance voting influence incentive rewards and incentive distribution?
Governance voting allows vePUFFER holders to allocate CARROT rewards by voting on gauges, with rewards distributed proportionally to each gauge’s vote percentage, ensuring fairness and transparency.
What are the key dates and the governance calendar?
Calendar: https://docs.puffer.fi/governance/calendar
*NB: vePUFFER (Voting Power) does not become active immediately upon staking, your vePUFFER only becomes active at the first Thursday at 00:00:00 UTC where the vePUFFER is at least three (3) days old due to the warmup period parameter.
Staking
What are the requirements and limitations for staking and unstaking PUFFER tokens?
Staking PUFFER tokens activates vePUFFER voting power after a 72-hour warm-up, ensuring fairness. Unstaking removes voting power and requires a 30-day lock period, and a 30-day exit queue.
This FAQ has been created as a guide for users looking to navigate Puffer Finance’s governance, staking, and rewards system during the remainder of Season 2.
About Puffer Finance
Puffer Finance is a leading innovator in Ethereum infrastructure, focusing on next-generation rollups supported by liquid restaking (LRT) and preconfirmation as an AVS. With products like Puffer UniFi and Puffer UniFi AVS on EigenLayer, we are dedicated to enhancing Ethereum’s decentralization. puffer.fi