Liquidity mining rewards extension

Extension of LM rewards plan

Considering the fact that Bancor liquidity mining currently has a substantial impact on the network we would like to propose an extension of the LM programs.

To maintain the growth of the Bancor network we want to keep rewarding liquidity providers with the BNT tokens.

The ecosystem is designed in a way where liquidity providers are incentivised in depositing earned rewards back to the ecosystem and earn compounded interest.

Liquidity mining program has brought significant growth to the Bancor network increasing liquidity from 10M to 200M and substantial increase in volume (and still growing):


We can also see an exponential growth of fees collected that in the long run should bring the BNT to the deflationary trend.

In order to maintain that, we would like to propose the extension of the liquidity mining rewards on all the pools for another 30 days.

As we can see, liquidity mining is a relevant strategy to bring more liquidity, volume and increase the overall network profitability.

Thanks to our motivation system that incentivizes the liquidity providers to restake their earned tokens we believe that the BNT earned in the LM process will be restaked to to increase the BNT liquidity space of the protocol.

Moreover, following what competition is doing, we believe that liquidity mining is essential to maintain the protocol attractiveness on the network until achieving higher market domination and users recognition.

Below some data about the current liquidity mining influence and the extension influence on the network.

Current LM status

Big caps:
Tokens released per pool considering everyone has 2x multiplier

  • Per pool 2,400,000.
    For the 6 pools 14,400,000

Small caps:
Tokens released per pool considering everyone has 2x multiplier

  • Per pool 240,000.
    For the 6 pool 1,440,000

Initial BNT supply before LM started: 69,000,000

Current supply of BNT from caps increase: 100,000,000*

*Note that with the exception of significant price changes, a large share of new supply remains inside the protocol’s pools earning fees until it is burned

Current inflation caused by the LM rewards:

  • To the BNT initial supply ~ 22%
  • To the Current BNT supply ~ 15%

Supply after the LM program is over without consideration of the BNT co-invested 84,840,000

Supply after the LM program is over with consideration of the BNT co-invested 115,840,000

Extending LM

For big caps 6 pools extension would bring worst case scenario 4,800,000 BNTs (if everyone has 2x multiplier) of inflation:

  • To the BNT initial supply ~ 5.3% inflation
  • To the Current BNT supply ~ 4% inflation

For small caps 6 pools extension would bring worst case scenario 480,000 BNTs (if everyone has 2x multiplier)of inflation :

  • To the BNT initial supply ~ 0.53%
  • To the Current BNT supply ~ 0.4%

Happy to hear your feedback.

7 Likes

I suggest do not hurry. LM program was do not released, but we want change something. This proposal could be considered if it were not possible for the pools to re-participate in the LM program.

1 Like

Strongly agree with extending the LM rewards.

2 Likes

I support the extension.

The large caps are a critical part of the ecosystem, and incentivizing the pools until the platform is self-sustaining is a cost I am willing to pay. To be clear - we cannot lean on the LM program forever; I see this as necessary to continue our rise to prominence. After we have a firm footing, I am confident the existing features of the protocol, and new features currently in development will provide sufficient incentive to remain an LP on Bancor.

1 Like

I am in favor of this proposal. Need to continue LM to boostrap liquidity and capture a greater market share.

2 Likes

Until pools are deepened significantly, LM extension is a “must do”.

Ultimately, the only real solution is to ensure BNT holders are adequately compensated for providing risk capital, by paying out a share of net trading fees (from protocol minted BNTs) to vBNT holders.

If vBNT holders are not adequately and well compensated for providing risk capital, they are likely to withdraw their capital and only provide limited amounts of capital.

2 Likes

Only 30 day extension on the LM rewards? Seems kind of short compared to the 12 weeks we had to stake hoping that they would even be implemented?

2 Likes

The LM rewards program has been great. But what is the plan after that?

Even when I could agree with this extension, we cannot keep LM rewards for ever, it is not sustainable.

What are the next steps?

Bancor is a great project that has innovated in the DeFi space and with a lot of potential and there are surely other ways to go and attract users. I’d love to see Bancor being integrated and used by other protocols, for example. Among other things.

1 Like

It was my understanding from the original LM proposal (Proposal: Liquidity Mining) that the “entire program lasts a total of 72 weeks” and that “a pool may be selected more than once to receive rewards for a 12-week cycle”. Could you please elaborate how the current proposal interplays with that? Will there be another vote to extend the LM for all pools after the 30 days or a per-pool extension vote or no extension? Why is the cycle shortened to 4 weeks?

I would actually propose an extension of 100 days (and lower the rewards a bit if deemed necessary). Today’s launch of the rewards will bring a lot of additional attention and for newcomers it might be even more encouraging to LP if they know they can enjoy the rewards for the full 100 days after which they will also have the full IL protection.

3 Likes

indeed… why does something that is still in flight need a vote to extend?

what does/did the 72 weeks represent? did something change?

is this what we’re doing now?:

image

2 Likes

We needed to extend rewards just for 30 days, because we are working on an innovative solution for the overall ecosystem, we hope we will be able to deliver it in the next 30 days, so than, the program will have the be adjusted and changed to the new solution.

Therefore we decided to extend the rewards on all the pools since we expected that majority of tokens will end up back in the pool. Also voting on overall extension is more efficient than choosing and discussing one poole after another.

When the new solution is ready, the rewards program will be rewritten and adjusted to the protocol new needs, for now we decided to extend just for 30 days.

2 Likes

Alright thanks for the clarification, this makes a lot of sense. Excited for the next Bancor innovation, keep up with the great work!

1 Like

Is the 30 day extension purely for the initial pools which currently have circa 10 days to go? AAVE and SNX currently have 55 days left of rewards. Would they just be left as is, or increased to 85 days should approval be granted? Also keen to understand how the ‘new protocol’ would impact the if going to implement within 30 days.

1 Like

Crypto is to rapid to plan for longer than 30 days, therefore we decided on more agile approach where we will decide on fly. Therefore it is to early to make any decisions on AAVE or SNX now.

New protocol innovation is confidential now, when we have smth to share we will.

1 Like

As a quiet large liquidity provider in one of your smaller pools, REN/BNT im concerned that the LM rewards will end once the timer goes to zero.
“In order to maintain that, we would like to propose the extension of the liquidity mining rewards on all the pools for another 30 days.” As quoted here I am assuming all the pools means also REN/BNT pool will extend the LM rewards for 30 days, if the proposal passes is that correct?

1 Like

I am excited about the top secret “new protocol innovation” that is coming. I am sure it will be good, given the amazing things that Bancor has contributed to the space. I look forward to it when details are ready to be shared.

In the meantime, I see that only 49 users have voted so far on this proposal. For a project this caliber, participation and engagement is really low (there have been proposals with only 5 people voting). Probably because of the gas fees. In most other projects, voting is a signature transaction that does not use gas. Hope something like this could be implemented in the future.

3 Likes

Will the new protocol innovation still have those juicy rewards/apy(80-100%) for LPs ?
If not maybe you guys should just keep it like that ? :slight_smile:

1 Like

“Can I give you more money?” Of course liquidity miners who currently are accumulating token BNT are going to vote yes… the contrarian views are not going to outweigh this voting decision… is there a flaw in governance here?

Yes, I support this as it will motivate more users to participate and use the BNT token. More value for us!