Draft Proposal: Use Ranked Choice Voting for Duration and BNT Reward Rates of Liquidity Mining Campaigns

Pending while snapshot team adds support for modifying the minimum percentage required for a choice to be considered the winning choice. This currently defaults to > 50% but our DAO has adopted supermajority rules and ideally a choice should only win if it has 66.7% or more of support.

Summary :

This proposal is seeking to introduce using the ranked choice voting strategy for the duration and rewards rate of future liquidity mining (abbreviated as LM going forward) campaigns. Additionally, it is also seeking to default all new LM campaigns to a 30 day default duration. This proposal will provide vBNT voters with the option to choose from multiple durations and rewards rate for any future LM campaigns.

Abstract :

The Bancor DAO typically defaults to a 12 week duration for new/renewals of LM campaigns. The vast majority of our LM campaigns emit 10K-20K BNT per week for mid cap pools (exceptions are BTC/ETH/LINK and stable coin pools which started at the same rate as BTC/ETH/LINK but have now been reduced twice). Typically, when voting on such proposals we default to a “Single Choice” voting strategy with two options “For” and “Against”. Since it is possible to set the duration and rewards rate of an LM campaign when it is initialized, this proposal is seeking to change the voting strategy on new and renewal of LM proposals from “Single Choice” to “Ranked Choice” voting.

Additionally, this proposal is also seeking to default all new LM campaigns to a 30 day default duration going forward.

The expected workflow for new LM campaigns going forward should follow the flowchart:

  1. New LM campaigns going forward will default to a 30 day duration
  2. When voting to Initialize an LM campaign, the DAO will use RCV (ranked choice voting) to set the BNT weekly reward rates with the following choices:
  • 10K BNT
  • 7.5K BNT
  • 5K BNT
  • Against
  1. After 30 days, the DAO will use RCV to determine the duration of the LM campaign
  • 12 weeks (current default)
  • 8 weeks
  • 4 weeks (chosen as a minimum to at least let folks that stick around for the full campaign to get 2x rewards)
  • against

Motivation :

Snapshot recently enabled ranked choice voting in their platform as part of the following commit. This will enable any spaces in snapshot to submit proposals with a ranked choice voting strategy. There is currently a “temp check” proposal in our own space with this strategy seeking to gauge the interest in Ethereum scaling solutions.

As an active community member, I have seen requests from our fellow Bancorians that would like to have multiple options when voting on LM proposals. I think that utilizing ranked choice voting on LM proposals (potentially others in the future) would allow us to give DAO members the ability to express their preferences that the current single choice voting system lacks.

A definition of ranked choice voting for those that are not familiar with this voting strategy:

A ranked-choice voting system (RCV) is an electoral system in which voters rank candidates by preference on their ballots. If a candidate wins a majority of first-preference votes, he or she is declared the winner. If no candidate wins a majority of first-preference votes, the candidate with the fewest first-preference votes is eliminated. First-preference votes cast for the failed candidate are eliminated, lifting the second-preference choices indicated on those ballots. A new tally is conducted to determine whether any candidate has won a majority of the adjusted votes. The process is repeated until a candidate wins an outright majority.

Source: ballotpedia.org

Benefits for implementing ranked choice voting include the following:

  1. Promotes majority support - The voting continues until one choice has the majority of votes. The final winning option has the support of the majority of vBNT voters.

  2. Provides more choice for voters - vBNT voters can select the choice that aligns best with their interests.

  3. Minimizes strategic voting - vBNT voters can select the choice that they believe is best. Anecdotally, I have heard that some individuals will not vote on LM proposals not because they are against the proposal but rather due to not being able to select a choice that is not the default 12 week option.

For :

  1. New LM campaigns going forward will default to a 30 day duration

  2. New LM campaigns will utilize ranked choice voting for determining the rewards rate with the following criteria (duration will default to 30 days going forward if approved by the DAO):

  • 10K BNT/ Week
  • 7.5K BNT/ Week
  • 5K BNT/ Week
  • Against
  1. LM renewals will utilize ranked choice voting with the following default periods (maintaining the existing rewards rate from when it was initialized unless changed adhoc):
  • 12 weeks
  • 8 weeks
  • 4 weeks
  • against

Against :

We should continue to utilize a single choice voting strategy for LM campaign proposals.


absolutely, ranked choice voting could be used to define the reward parameters around LM too. there are smaller caps that we could alocate a much smaller amount of BNT rewards to in order to get the desired effect. a good example is FARM, we want to become the biggest pool because that will allow the harvest team to move the buyback mechanism onto bancor but i don’t think we should be printing willy nilly so we could have incentives that target liquidity. just a thought.


Unabashedly will vote FOR; however, I do see merit in starting all LM campaigns with the same default duration to gauge relative performance of one LP vs. another.

Another great idea, but I’ll still ask that we start all pools with a default LM reward amount of BNT.

If we start all pools on equal LM terms, then the performance data for each pool could be compared apples to apples. We will see where LM worked, and where it didn’t.

There are numerous examples of pools under-performing, MKR being the latest (of which I am an LP). While I enjoyed the benefits of the MKR/BNT pool, it siphoned away LM for 12 weeks even though it was clear much earlier that it was not producing. As such, its LM could have been better utilized elsewhere.

LM extension proposals would be able to review performance data into account and propose adjustments to decide whether we should extend the pool’s LM or to let the pool’s LM expire. An informed decision regarding LM extension (time) and value (amount of BNT) would be conveyed by each community member via ranked choice voting.

I humbly propose the following modification:

  1. automatically set LM at 4 weeks for all pools that shall receive LM (for the reason cited by @glenn)
  2. utilize ranked choice to determine LM extensions

100% on this. We shouldn’t be forcing ourselves to wait 1/4 of a year before being able to shut down inflation. 4 Weeks should be the standard.


Strongly support! I want to apply preference voting to all proposals that can benefit - including fee changes, co-investments, and conditional co-investment on successful whitelisting.

However, we need to develop this proposal. In it’s current form, there is no clear indication how majority rules are handled. Current DAO policy requires a 2/3 majority to pass a vote, and limits Snapshot proposals to 3 days. If I have understood your proposal correctly, this may need to be revised - which is great, it just needs to be explicit.

I wonder if we could set up a call? I would be very interested to discuss this with you and see if we can flesh out a framework for this kind of decision-making.


Appreciate all the feedback. This proposal is still in very early stages and needs more polishing.

Yes, some background here for others from our initial LM campaigns:

Large-cap pools receive 100,000–200,000 BNT per week;
mid-cap pools receive 10,000–20,000 BNT per week.

The pools which we consider large cap are the BTC, ETH, and LINK pools. The stable pools also started with large cap rewards but have since been reduced twice (I don’t think the latest reduction has gone into effect yet). I think we considered pools with over 50M in liquidity as large cap and anything below that as Mid/Low cap tokens.

There is more details in the initial LM proposal: Proposal: Liquidity Mining

I also think that this is a good starting baseline for any new LM campaigns. This will let the program end sooner if the pool is not performing to our standards rather than it being prolonged for longer than 4 weeks. An extension can still be brought up to the DAO and we can decide based on the data whether it makes sense to extend the LM campaign or not.


I am 100% on board and wanted to start small (targeting LM campaigns first to gauge any impact) but I think if we polish this proposal then we can expand this to other proposals as well.

Yes, I don’t think this proposal is no where near its final form yet and we can discuss as a community what the final framework should be.

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Semi relevant but posting here as well. Pool performed well initially and its volume (therefore lower fees) only dropped in the past month:

could be the crypto market in general but also MKR having good liquidity in other DEXes and us having more competition. More details in Proposal: Lower MKR-BNT Fees to 0.1%


The idea of 4 week LM is interesting - as it is likely to attract LPs who will wait the full 100 days, even tho LM is 30…You got me thinking sir. Good for real users, bad for dumping farmers.

As for ranked choice - I’m for it, but I guess within reason. I wouldn’t want too many options for every vote.

Voting rates are finally up, I would not want them to fall as the voting process gets more complicated.


I support this proposal and will give it a solid FOR. Honestly I was wondering why we weren’t already doing this–now I know. :rofl: I also agree that first-time liquidity mining applicants should be limited to a default 4-week duration. But further, I think that it should be made easier to get LM started the first time, but harder to get extensions. The idea being we want to get that data for as many pools as possible, but we want to weed out the ones that LM didn’t work for.

If a pool gets LM and gets poor results in that default period, then they can apply for an extension later (when market conditions are more favorable) to get another go, preferably with the default period again–we want pools that get the results we want to get LM rewards longer so we can get more good results.


Here are some items that we should follow up on with snapshot team (I will ask in their discord):

  1. What is the threshold that they are using to consider a choice as having majority support? If this is 50% then that’s something that we might look at revising for our snapshot space. We require a choice to have super majority (66.7%) on proposals using the existing “single choice” voting strategy in order to be consider valid.

  2. With multiple choices available, not every option has to be ranked. This could lead to certain scenarios where a choice doesn’t have clear majority if vBNT voters don’t rank all their choices. This could potentially be a validation check on the snapshot side that requires vBNT voters to rank all choices. The pertinent question is whether this is something that we as DAO care to have or would be OK with having proposals that might not have a clear winner (in which case it just wouldn’t pass)?


We need to organize this.

The task is to create an explicit description of how ranked choice voting is used in all contexts - supermajority, quorum, maximum number of options (Snapshot allows any number), rules on ambiguous choices and outcomes, etc.

It is not so important what we decide on, so much as that these rules exist at all.


fully agreed, no reasons to revote it with reduce period of LM.

This in my opinion should be the general framework for LM

I think a really useful thing we can do is aggregate a bunch of the new pools that could be considered for LM and then vote on say the top one or two. This way we could streamline the LM incentives since we can choose which project should go up for a vote before we just randomly chuck projects up.

Could be phrased like this with a maximum amount of candidates and certain requirements like depth, apr, and amount of time pool has stayed full (if any) :

(Temperature Check) : Which Pools would you like to see voted on for Liquidity Mining Incentives ?

  1. LQTY
  2. RUNE
  3. FARM
  4. ANKR
  5. NOIA
  6. BOND

From here on, we can then take the top 2 pools and put them up to a votes where the options define the time and amount of BNT allotted for each :

Should Project X Receive LM Incentives ?
Against - No LM
For - 4 Weeks, 10K BNT / Week
For - 8 Weeks, 10K BNT / Week
For - 4 Weeks, 5K BNT / Week
For - 8 Weeks, 5K BNT / Week

Alternatively, we could have the standard LM set to 4 Weeks as was discussed previously and simply vote on the amount of BNT allotted for each campaign. This way the DAO does not commit itself for a long amount of time to unsuccessful LM campaigns.

Should Project X Receive LM Incentives ?
Against - No LM
For - 10K BNT / Week
For - 7.5K BNT / Week
For - 5K BNT / Week
For - 2.5K BNT / Week

This can allow us to be more flexible with LM, since rather than a flat 10K we can tailor LM to the needs of the DAO. A good example as I’ve mentioned before is FARM, which we really should want to be the #1 Pool for but does not necessarily warrant 10K BNT Weekly emmisions. A small campaign like 2.5K BNT Could probably grow the pool to be bigger than Uniswap, after the LM ends the native APRs should naturally be bigger since the buyback mechanism would be moved to bancor and we would therefore have essentially stolen a majority of the volume. Having more volume would make us more attractive to LPs and would mean we’d retain most of the liquidity gained.

Extension Votes can be a simple For/Against Votes with an added option to adjust the rewards should someone propose it.


I think the list should be reasonably short (maybe four options?), and the fifth option should be “None of these”.

I have some loose ends to tie up today, but then I am happy to work on a draft doc for standardizing multiple choice voting. I will make sure it is ready before the next Snapshot date (12th July).


This framework reminds of the pool race that Nate had brought up and we could potentially adopt some of those ideas (e.g. certain amount of liquidity, whitelist status, no previous LM etc…) if we want to do something similar (i.e. the tokens that should be voted on by the community). Ranked choice voting lends itself well to this type of proposal to let the DAO decide.

I think the choices here are good but I don’t think we should go lower than 5K BNT per week (might be similar to the 4 week minimum for a campaign). I think the pools that would potentially be considered for these LM campaigns would roughly be similar sized to ZCN/MPH/NDX


and with 5K BNT per week (these tokens should all be getting 10K per week) it means that on the TKN side they would be seeing 17%-25% APR at 2X. I think this is a good APR to attract LPs for these tokens. Anything lower might not be worth it for these token holders specially if we are competing with any native staking options that they might have. e.g:

LQTY staking has 17% APR
Aave 7% APR
veCRV roughly 10%-15% APR

and I think this is the norm for most tokens which have native staking capabilities (roughly 15% or more which is what we should try to target).

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FYI, a choice needs a minimum of 50% to win a vote as long as there are still more than two choices. When it is down to two choices, the choice with the highest percent wins.

This is from their docs:

Each voter may rank any number of choices. Votes are initially counted for each voter’s top choice. If a candidate has more than half of the vote based on first-choices, that choice wins. If not, then the choice with the fewest votes is eliminated. The voters who selected the defeated choice as a first choice then have their votes added to the totals of their next choice. This process continues until a choice has more than half of the votes. When the field is reduced to two, it has become an “instant runoff” that allows a comparison of the top two choice head-to-head.

The folks from snapshot pointed me to their repository if we wanted to make this change but he also mentioned that we should wait because he wants to:

But in this case you might want to wait, I will have a chat with the team about allowing such changes to be made easily to voting types

I raised the following feature request for this so that it is on their agenda.

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Hey frens, I raised a tweked version of out usual LM for FARM for the reasons I put above and in the proposal. This should help to test lower weekly emmisions on LM Campaigns and tighter time frames around LM. Proposal : Targeted LM Campaign for FARM to capture Buyback Mechanism Feel free to drop by with any suggestions.


I have updated the original post after incorporating offline and feedback from this thread. Also included a diagram that shows the typical flow of an LM campaign if this proposal goes into effect.