Proposal: Activate LM Rewards for Enzyme (MLN) with an 8-Week Duration + Increase Co-Investment Limit to 500k

DAO Archive (SUBMITTED)
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Proposal: Activate LM Rewards for Enzyme (MLN) with an 8-Week Duration + Increase Co-Investment Limit to 500k

This proposal is expected to appear on Snapshot for voting on Monday, August 2nd at 12:00 pm UTC

MLN LM MEME.PNG

Proposal to add LM rewards to the BNT/MLN pool with an 8-week duration, and increase the co-investment from the Bancor DAO from 250k, to 500k BNT. Reward rate would be similar to that of the FARM/BNT pool, which will see 5k BNT/Week for 8 weeks.

TL;DR

*** Enable LM rewards at 5,000 BNT/week for 8 weeks.**
*** 8 weeks to capture MLN LP’s from the Sushi MLN/WETH pool who are suffering >30% IL.**
*** Priority is to grow the MLN/BNT pool to be the biggest pool for MLN liquidity.**
*** 50/50 split rewards on BNT/MLN.**
*** Enzyme DAO members have contributed over 10,000 MLN to the pool (>$700k) resulting in there being great confidence from the Enzyme community in Bancor’s IL protection mechanism and liquidity provision incentives.**

Primary Focus of this LM Campaign

Enzyme Finance has a strong DAO of asset managers that have taken notice of the depth of pools across the Bancor Network and has shown support for Bancor by adding over 10,000 MLN to the BNT/MLN pool increasing pool depth by 35%. The primary focus of this LM campaign will be to target LPs from the Sushi Swap MLN/WETH pool that currently has ~$3.1m in liquidity. WETH-MLN | SushiSwap Analytics

Unfortunately there has been IL >30% by providing liquidity to this pool on Sushi Swap, meaning this LM campaign can serve as a polarizing incentive for MLN LP’s to bring their liquidity to Bancor. Target: >$3.5m in total pool depth on Bancor (Current: $2.1m)

MLN IL ROI
MLN IL ROI779Ă—64 32.7 KB

MLN LIQUIDITY
MLN LIQUIDITY780Ă—378 54.1 KB

In comparison to other LM campaigns + Benefit to MLN Holders/LP’s:

In many ways the idea for this LM campaign was inspired by the success of the FARM/BNT LM campaign, that has managed to pull significant liquidity from Uniswap and bring it, as well as the goal of targeting the buyback mechanism to Bancor, increasing volume, which in turn generates more fees for LP’s. The goal is the same for MLN, however, there is no buyback mechanism (yet), and MLN holders are still looking for the best place to park their MLN holdings with mitigated risk, which as we know, Bancor is that place. This LM campaign would make that a no-brainer and open the door to another $1.55m of MLN liquidity sitting (suffering) on Sushi Swap, along with the increased BNT co-investment from the DAO would open up another $1.6m of MLN liquidity to be deposited. So in just upside alone, there is ~$3.1m (depth of the Sushi pool!) worth of MLN liquidity to go after, making Bancor the default source of liquidity to trade MLN. MLN fees have also shown to have picked up greatly over the last 60-90 days, and show no sign of slowing down, after having being listed on Coinbase as well as Binance, will move activity on-chain for trading, as holders steadily grow - currently at 5,475.

MLN TOP 100 HOLDERS
MLN TOP 100 HOLDERS778Ă—283 78.9 KB

MLN FEE STATS
MLN FEE STATS947Ă—594 45.5 KB

Public Support, Team/Community Strengthening, & TAM Opportunity.

It is no secret that Bancor V3 is well underway, and Enzyme Finance is in the process of finalizing their Sulu (V3) rollout. Both protocols are in the works shipping massive upgrades and appealing to wider and wider user bases. On Enzyme, asset managers (making up its $93m in TVL) can provide liquidity across a variety of platforms (in which they suffer great IL from, depending on the pair) Enzyme asset managers ultimately fit the ethos of the Bancor Network in the sense that they are protecting depositors assets. An ambitious partnership in the future could be LP’ing on Bancor directly from the Enzyme UI, and as treasuries (such as Unslashed Finance’s treasury) get deposited into Enzyme, they will seek vehicles to grow/protect their treasury assets, as DeFi becomes more interoperable, one vehicle could be Bancor in the not-so-distant future. A greater purpose for this LM campaign is further cementing comradery between the Bancor x Enzyme communities and acknowledging the Enzyme DAO’s support for Bancor, as their team would publicly back this proposal and vote.

MLN TVL
MLN TVL723Ă—60 13.1 KB

Voting Options

  1. FOR - 8 Weeks at 5,000BNT per Week
  2. Against - No LM Rewards
3 Likes
2

Very interesting, would love to see this.

MLN is a good community to involve ourselves further in, 8 weeks with 5K BNT a week seems reasonable.

2 Likes
3

I am opposed unless MLN will somehow drive value back to the protocol.

Either in the form of using Bancor for swaps or some further integration.

I think LM shouldn’t be free for these projects.

If we get a commitment from MLN - very on board with this.

5 Likes
4

Absolutely, Enzyme has shown support publicly for the proposal and Enzyme council members have expressed to me their willingness to integrate Bancor for swaps and future developments:

image
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Agreed LM should not be free, as of current, Enzyme offers asset managers trading through Paraswap which does offer a routing option from Bancor. A direct integration from Enzyme → Bancor is something the Enzyme council has embraced and can explore upon completion of Sulu (Enzyme V3) and Bancor’s V3.

2 Likes
5

I appreciate your position. However, LM rewards are expensive.

When you say 5000 BNT per week - I assume that means 10,000 BNT per week with multipliers.

At current price, over 8 weeks, this can cost 80,000 BNT ($260,000)

Integrating paraswap isn’t enough.

“Enzyme Finance has a strong DAO of asset managers” @ThePerpetual - can you give some estimate at how much on-chain volume these asset managers generate? What percentage of this volume goes through Bancor pools?

But $260,000 because they use paraswap doesn’t seem like a good deal for the Bancor protocol.

@tenzent - I don’t know too much about their asset managers, but I will only support this proposal if they commit to having their asset managers use Bancor. What do you think?

2 Likes
6

Correct, and I appreciate your input. The idea is not to facilitate a Paraswap integration as this already exists on Enzyme, the idea is to further solidify the relationship with Enzyme and use an LM campaign to ensure that Enzyme does integrate Bancor directly, which the Enzyme council voiced support in doing.

As an asset manager of an Enzyme vault myself, here are options to go swap MLN → BNT the idea is to integrate Bancor as an engine for swaps on Enzyme. See pic below for current options to make this swap.

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image1524Ă—452 53.8 KB

https://app.enzyme.finance/network/trades - Here you can see the trade volume/activity on Enzyme over the last 24hrs (~$65m in total volume)

2 Likes
7

I don’t think forcing them to only use Bancor for trading would be a feasible solutions. But adding Bancor directly rather than being routed through aggregators removes a layer of fees and can sometimes lead to us getting more trades. This can be seen now through the Metamask implementation of Bancor : https://duneanalytics.com/codefi/metamask-swaps-. Integrating directly into other wallets can be super helpful for the protocol gaining more revenue.

the Enzyme People really like Bancor, and there is room here for us to inter-grate further with them.

I do agree tho, me no like inflation.

2 Likes
8

Forcing sounds too strong.

What about saying all swaps that can be done with under .5% slippage should be routed directly to Bancor pools.

Seems fair seeing as they have no IL risk. Add LM on top of that and its a crazy good deal for them.

2 Likes
9

I like this idea, and can definitely propose this to the Enzyme Council and see if this is an integration we can champion. As both Bancor + Enzyme would benefit greatly.

  1. Greatly increasing trade volume for Bancor.
  2. Asset managers on Enzyme get a better trading experience.

In addition, Enzyme has introduced value capture for the MLN token by charging a fee to asset managers and using this to buy back and burn the MLN token, I can propose to Enzyme that they conduct this buy back and burn mechanism via Bancor.

1 Like
10

If they move their buy back to Bancor - this will have my vote.

Can you explain how the DAO asset managers work? Do they create volume on chain?

2 Likes
11

This is an interesting proposal and the following two potential integrations:

  1. Integrate Bancor directly in their swap interface
  2. Target their buyback mechanism at the Bancor pool MLN pool

seem like its worthy of an LM campaign if we can make this happen. My concern is the following:

A direct integration from Enzyme → Bancor is something the Enzyme council has embraced and can explore upon completion of Sulu (Enzyme V3) and Bancor’s V3.

They can already do this integration before Bancor V3 is released as we have implemented a new swap API to more easily integrate with our platform. If they are currently in the process of working on the Enzyme V3 release (therefore don’t have time for other dev work) and this is more than 8 weeks off then my concern is that the LM campaign might have ended and we no longer have much of a bargaining chip. It would take another LM campaign from our end to potentially have more sway about an integration.

For the buyback, we should try to figure out how they will be implementing it. Are they going to arbitrage both CEXes and DEXes or one or the other? If they are solely going the route of DEXes, will they use all sources of MLN liquidity or target the source with the most depth?

Ultimately, I think this is better to be delayed until we are closed to the Bancor V3 release due to the hinted better composability. I think the potential for that integration from the Enzyme side and us providing incentivizes for that to occur will most likely outweigh the current two integrations (although they would also be nice to have).

2 Likes
12

Hey all,

Chiming in here as a member of the Enzyme Council and major LP on Bancor.

I think the biggest integration I am looking forward to that I’ve proposed to the team is bringing single sided staking to Enzyme so that our enzyme funds can become LPs on Bancor.
IMO Bancor is one of the best ways to make assets capital efficient, especially without IL. And in the last 12 months we’ve seen on-chain funds grow from 1mm in TVL to over 100mm in TVL. As more and more DAOs begin using the Enzyme stack to manage their treasuries, I think Bancor single-sided staking will be a major addition. I’ve brought interest in this up both to Mona (founder of Enzyme) and Nate (Bancor growth). I believe a roll out after both Bancor V3 and Sulu (Enzyme V3) is a realistic aim.

Happy to further explore other collaborations, but I think this alone could be a major value driver.

5 Likes
13

Welcome Felix!

We all agree that Bancor is the best place for LPs.

However, you are asking for a lot of BNT. Can you commit to moving the buy back to buy back MLN from a Bancor pool?

If not, this doesn’t seem like a good use of BNT LM

1 Like