Proposal: Extend Liquidity Mining for BTC/ETH/LINK

DAO Archive (SUBMITTED)
1

Extension of LM rewards plan

Stake vBNT for voting on this proposal before Wednesday 15st August, 2021 (UTC)

TL;DR

  1. The LM Rewards program will be extended on ETH, LINK, WBTC.
  2. The current award rates for each pool will be unaffected.
  3. The rewards will be extended for another 90 days, however will be stopped in the day of release of V3 if V3 is deployed in 90 days.

Extension of Liquidity Mining on Current Pools

The LM rewards schedule for ETH, INK, WBTC, due to end in less than 2 weeks. To maintain liquidity in the near term, and to sustain liquidity while Bancor prepares new products and upgrades, wherein it is proposed to extend the LM rewards program on these pools for a further 12 weeks with conditions to stop if the V3 is released

  1. ETH, LINK, and WBTC will continue to receive emissions of 100-200K BNT per week, for an additional 12 weeks.
  2. Upon release of the V3, a new LM incentives program may be considered by the DAO. Therefore the current liquidity mining plan will be stopped to incentivise migration.

Discussion

  1. Around 75% of tokens have been restaked back into the pools; therefore, the LM rewards have increased the space for single-sided TKN deposits, resulting in growth of the network, rather than creating a sell pressure.

  2. The above 3 pools hold the majority of the protocol TVL, therefore curation of these pools is essential to maintain the position of the Bancor protocol on the market.

  3. The 3 mentioned above pools drive most of the volume on the ecosystem, and also present reasonable impermanent loss liability.

  4. The pools should be curated until the new V3 design is released so the funds are migrated without loss of significant TVL prior the protocol upgrade

Summary

  1. At this stage, current protocol growth requires LM to maintain the momentum and stay competitive in the space (the DAO seems aware of this).
  2. After releasing the V3 and supporting the smooth liquidity migration, LM extension will no longer be necessary, and the voting for LM extensions may be concluded.
  3. A large majority of the LM rewards are re-staked to the protocol, increasing the TVL and the space available for TKN deposits with single sided exposure. If this trend continues, the LM program is more of an asset than a liability, and can be managed more assertively.
  4. In the long term, Bancor is aiming towards sustainable annual inflation of 4%, in order to achieve that, Bancor requires significant volume and Vortex to be applied.
  5. **Extension of LM rewards on ETH, WBTC and LINK for 12 weeks will provide 1,200,000 - 2,400,000 BNTs as rewards, (depends on the multiplier).
4 Likes
2

Thanks for submitting this proposal. Similar to previous renewals on the large cap pools, I will be voting in favor of the extension. I couldn’t help but notice the “in anticipation for V3” tacked onto the title…perhaps this is sooner than expect? :wink:

3

Honestly no idea, I just think that the pools should be supported until V3 is ready but should not be supported after it it released. So I proposed 3 months extension with an option to break it if the V3 is ready. But when? No idea

2 Likes
4

Agree on extension here. At least until V3.

1 Like
5

Extension is a yes for our megas as always. thanks for putting these together michael.

1 Like