This proposal is expected to appear on Snapshot for voting on Monday July 12th.
The Liquidity Mining program was a proven success with adding over $10,000,000 of liquidity to the BAT pool. We saw several large whales join the Bancor Protocol due to this proposal.
The program also allowed Bancor’s BAT pool to have the deepest liquidity pool for BAT compared to all DEX. See below for a recent snapshot comparison. Current depth on BNT is $15,000,000+.
It is clear that the LM reward program on BAT was a success. We grew liquidity and fees increased, as this program is intended to do.
The reasoning to extend LM on BAT is to retain this liquidity. If we do not extend LM, there are higher yielding platforms for the BAT holders to move their funds to. We will lose a significant amount of the liquidity we gained and fees will go down.
Vote FOR to extend LM on BAT for an additional 12 weeks.
Vote AGAINST to not re-new LM on BAT.
We should make an effort to retain the liquidity. I think we can pretty handily afford holding this one up until V3 launches, given that volume is still low; we may consider lowering the fee, though, precisely because volume is low, and we need to draw traffic to make the LM button mean something here. That can be a separate proposal, however.
There is 25 days remaining of LM rewards on this pool. We should probably wait till it’s closer to the expiry time to vote in this renewal (July 19th).
I don’t have the total amount of fees generated, but it has significantly increased since LM started. See chart included.
These past weeks have low volume across the entire market anyways. When volume picks up, Bancor will receive a large share of BAT volume, if LM is renewed.
LM rewards are an incentive program, and are expensive. I would like to consider activating LM rewards on other pools that do not already have such deep liquidity, like ICHI or FARM. IL insurance is a significant draw card for LPs. It is not clear that ending LM rewards will lead to migration of LPs as they cannot get IL insurance in Uni or Suchi. MKR pool remains a deep pool even though LM rewards have ended.
Have to agree with @Sjwill on this one. The BAT pool still has a lot of space for BAT tokens, suggesting that LM rewards are not a good motivator for BAT token holders. It is not clear what the purpose is of increasing the LM program at this stage. I would be more interested in activating LM on new pools, than extending this one.
I agree with this, the rates on BNT is also quite high which means BNT Stakers don’t necessarily want to stake in the BAT pool even if the APRs are high.
I think this pool should be capable of more volume but I think that the current fee .5% is holding us back (we have competitors). A quick test for this, when swapping from BNT to BAT, I am seeing that any amount above 40 BNT ($130) does not go through Bancor. 1inch essentially is using the USDT pool (and others) to swap the BNT and then sending it to some other location:
Appreciate everyone’s feedback. Thank you Glenn for the additional details. I think the fee adjustment would help. Still concerned that liquidity leaves the pool if LM is not extended. Based on the fees, it appears BAT LM is justified. Higher fees than ALPHA and that got re-extended.
Good candidate to adjust the fee. Want to try 0.1% for a little while? If we are the deepest liquidity source, could be a good opportunity to really test the effect of the fee. We can build into the proposal that if the APY is harmed after 2 weeks, that the fee should be raised until we find the clutch point.
Fees will probably not go down all that much but APRs will rebalance to sustainable amounts. The BAT Pool has had it’s run, there would have to be some really extraneous circumstances like collaboration for me to vote for this. Should we loose 70% of our depth we would still be the biggest pool so I don’t see a decrease in liquidity as hurting our fees too much.
