Hey Guys,
Wanted to open this topic up for discussion, though I don’t myself have a clear solution.
There is no real incentive to initially bootstrapping pools, as a result we have multiple pools even since the launch of V2.1 that haven’t been able to have IL Protection enabled.
The DAO Should provide some sort of small incentive to LPs that contribute to the initial double sided liquidity, since this is largely not for their own benefit but as a belief in Bancor.
I think the incentive of having IL protection and single sided staking once the pool is bootstrapped by the community should be a great motivator. From my perspective, having the community bootstrap their own pools show some commitment to the protocol and the platform given that we have a co-investment from our side (even if it is the default). I find that pools that haven’t been bootstrapped are generally due to lack of community engagement or interest from those token holders.
On the other end of the spectrum, we have communities like the LPL folks that had 1M+ plus in liquidity before they even got whitelisted which to me shows that they have an interest in our platform and are contributing to growing our eco-system. Also, the initial bootstrap is only required until the pool grows to a sufficient size (say 3K BNT + the equivalent TKN amount) and at that point the original LP can remove their dual sided stake to switch over to single sided staking.
I agree mostly with you on this, however there are pools among those that haven’t been enabled that would be an advantage to bancor. Pools like COMP CRV UMA (UMA is very much involved with bancor) have a good amount of traction in other AMMs through selfish LPs seeking incentives even for projects that offer native staking. The problem is that there is no advantage to an independant LP to join the pool initially and take that risk since they have no idea what kind of returns the pool would garner. A good rule could be to incentivize only pools in, lets say, the top 50~ or by using other AMM pools as a benchmark.
The three tokens I mentioned above are incredibly lucrative pools, but other platforms incentives act as a deterrent for anyone wanting to seed the bancor pool. As far as projects seeding the pool it would run counter to some economic models to do so, since a lot of them have utility native to their platform. That does not at all mean that bancor shouldn’t still try to capitalize on their tokens.
I don’t see anything wrong with rewarding LPs who take the risk to get the pool to the point where ILP can be enabled; it doesn’t have to be huge, it just has to be something big enough to say “thanks for potentially eating a little bit of dirt for the good of the protocol”, especially if they keep their liquidity in for a lengthy period before ILP.
agreed, also worth noting that whitelisting a pool currently only requires around 8,000 USD worth of crypto, so even if we give them a decent sized reward it wouldn’t be that much.
we could give a flat 50-100 BNT Reward per pool, should be more than enough. should include some sort of mechanism stopping pools that lose whitelist from getting the rewards over and over if they fall below the required liq amount.
It is an important point to explore. I have been wrestling with some of these tokens since v2.1 launched in October of last year. I think the major problem with some of these is that their native staking options are pretty good. CRV and CRO both have fairly decent APY on their respective platforms, and their token holders are pretty insulated from the rest of the DeFi world (a massive overgeneralization, I know).
If you had to pick one or two, that you thought were highly advantageous, which would you choose? There is basically zero BNB left on ethereum, so we can scratch that one. Probably want to avoid BUSD, GUSD, and sUSD for now. Let’s assume CRO and CRV are going to be difficult to pull away from their homes (happy to be challenged on this). The BTC wrappers are good, but maybe less attractive from a community perspective?
If we accept this narrowing of the choices, we are left with:
If you had to pick three to focus on, what would you choose?
For me it would be : COMP, BAND, ZRX and UMA
UMA Community is very receptive to us so perhaps a program could be worked out to incentivize liquidity. ZRX is an Aggregator token so it would be very reasonable to assume we would get traffic. Comp and Band have massive pools with good volume. I think the ONSEN might be deterring these two last tokens.
ZRX is one of my picks as well.
It might be worthwhile to reach out to the team to see if they think it is interesting to their community, and depending on interest, maybe its a good candidate for liquidity mining.
I think that’s a much better list but like you mentioned (incentives on other platforms), will make it very hard for us to build any liquidity for these projects that already have any native staking opportunities in their platforms. Even if we just incentivize bootstrapping, I don’t think that will help unless we actually do an LM campaign as Marc suggested.
Very hard for CRV as a large CRV holder myself. Locking into the platform as veCRV (non transferable at that point) gets you a lot of benefits (boosting, platform fees, voting rights). There is also CVX at the moment which has lucrative returns for CRV holders that swap CRV for cvxCRV (veCRV rewards plus CVX rewards). If you LP in the CRV-cvxCRV pool on sushiswap you get CVX rewards and Sushi rewards on top. It is going to be very difficult to pull any liquidity for CRV, cvxCRV, or CVX away from their native platforms due to the rewards that they offer.
Good choices, ZRX has barely any Uni V3 liquidity (good for us).
Hey guys, first of all I love the idea of incentivizing bootstrapping and would love to bounce around an idea:
Giving the address who bootstraps boosted fee revenue for the first 100 days via tiers, such as $10k, $100k, $1m in liquidity bootstrapping? ($ tiers can be edited)
Would love to hear your thoughts and how we can further expand on it. In order to incentivize bootstrapping on Bancor vs other AMM’s like Uniswap and Sushiswap, and countless others… A reward of sorts can be valuable in drawing fresh, sticky liquidity as we approach V3 launch.
