Proposal: Extend LM Rewards for The Graph (GRT)

This proposal is expected to appear on Snapshot for voting on Monday May 24th


As a community member and LP on both sides of the BNT/GRT pool, I would like to propose extending the LM Rewards for GRT for an additional 12 weeks.

The Graph has become a standard blockchain querying service for multiple ecosystems. Since initial whitelisting, the Graph has added indexing and querying services for: Polkadot, NEAR, Celo, Solana, Polygon, Fantom and BSC, in addition to Ethereum and IPFS which have been supported since launch. The Graph has grown in query volume an average of over 20% month over month, and recently announced over 20 billion queries serviced for the month of April. They also recently unveiled Scalar, a high scalability payments service for compensating indexers for query requests. The Graph is well positioned to become a major querying service for the entirety of Web3.

The Graph pool has brought $23M of liquidity to Bancor and regularly supports daily volumes in the low seven figures. Interest in joining the GRT side of the pool has been high, with the GRT side frequently having very little or no space available. The LM Rewards mechanism clearly attracts GRT liquidity providers who are interested in APY. The current LM Rewards (plus fees) results in an APY of nearly 28%, far exceeding the APY for delegation in the Graph, which tends to be around 10%. With the much-anticipated unlocking of coins in June and July, it is possible that the Graph delegation APY would become even less attractive to stakers owing to additional competition. This would result in more significant interest in staking in the Bancor pool.

As the Graph expands with the growth of Web3, Bancor’s LM Reward support will attract more liquidity, providers, and volume. Thank you for considering this request for extension.


Do you think this will bring more LPs, more traders or both?

I definitely expect that extending LM Rewards will bring more LPs (provided that enough BNT is staked to open the GRT side of the pool). Not only are the Bancor LM Rewards considerably higher returns versus virtually any indexer providing delegation rewards in the Graph, but the June/July token releases could introduce a new wave of GRT holders trying to find APY. There could be a significant increase in the GRT staking market in crypto overall.

Once the June/July releases occur, GRT supply and holders will increase, as well as its market cap. Assuming GRT price remains stable, the Graph market cap will grow to become a top-25 token as a result of the supply release. This should increase the overall volume of the token as well as its profile within the crypto markets. I would expect that the increased supply, holders, and notoriety would also translate to an increase in traders. If Bancor is a major exchange for GRT trading, the increase in traders should accrue to the benefit of Bancor as well.


HMM - if the token becomes a top 25 token, it costs the protocol IL insurance.

I think it’s only smart if their token generates good volume on Bancor.

The token release itself would not create IL insurance obligations on Bancor. If the GRT token price remains stable after unlock, no IL would occur within the pool. Simply by virtue of the supply increase, GRT’s rank will increase substantially.

I believe that with the rank increase, increase in holders, as well as the continued growth of Web3 and GRT indexing services, it is a relatively safe assumption that trading volumes will also grow.

Just to reaffirm the graphguy’s estimates on rewards on Bancor and The Graph Network:

Bancor stats (my own):
1.33 BNT / 10k GRT / day
0.95 GRT / 10k GRT / day

The Graph stats:
Average rewards based on my own stats: 3.02 GRT / 10k delegated GRT / day ≈ 11.02% APY (*)
Current estimate rewards taken from 2.65 GRT / 10k delegated GRT / day ≈ 9.76% APY (**)

(*) my own stats based on 100 days of delegation to 4 indexers.
(**) current estimate taken from all (97) active indexer stats on

Average price ratio between BNT and GRT for the past 146 days (since the launch of GRT token):
1 BNT = 3.82 GRT

If rewards are converted to GRT, then Bancor gives a user:
1.33 * 3.82 + 0.95 = 6.03 GRT / 10k GRT / day
The Graph Network:
2.65 GRT / 10k GRT / day

The above shows that currently Bancor offers a more lucrative option for GRT holders than The Graph Network.


Just appending here to give some data to the community. The BNT-GRT pool has roughly ~$25M in liquidity and we are by far the largest as compared to other DEXes (top two pools are on Uniswap, there is a third pool on Sushiswap with about ~2M):


The GRT liquidity in this pool has been roughly the same since the week of 3/29:

which means that the pool size in terms of GRT tokens hasn’t changed much. The fees collected by this pool have been roughly between 9K-33K per week:

which matches the volume that we have seen (~4M to ~16M):

With that said, here is the total fees collected since the week of 2/15 for the different tokens that have come up for renewal since then:

symbol sum
GRT $181,760.84
REN $251,521.16
AAVE $332,835.42
SNX $344,110.55
YFI $394,028.74
wNXM $757,702.68
MATIC $935,885.24
ENJ $1,488,746.75

Note that these results are subject to change since the week of 5/10 hasn’t concluded yet.

full data below:

symbol time Conversion Fees in USD Volume in USD
GRT 2/15/2021 0:00 $24.31 $12,132.13
GRT 2/22/2021 0:00 $783.87 $391,149.60
GRT 3/1/2021 0:00 $9,150.27 $4,565,985.12
GRT 3/8/2021 0:00 $24,985.13 $12,467,581.62
GRT 3/15/2021 0:00 $14,289.69 $7,130,557.30
GRT 3/22/2021 0:00 $12,119.04 $6,047,398.62
GRT 3/29/2021 0:00 $17,756.68 $8,860,584.64
GRT 4/5/2021 0:00 $22,310.46 $11,132,920.63
GRT 4/12/2021 0:00 $33,745.86 $16,839,185.46
GRT 4/19/2021 0:00 $14,294.89 $7,133,150.41
GRT 4/26/2021 0:00 $11,645.35 $5,811,028.74
GRT 5/3/2021 0:00 $13,513.38 $6,743,177.98
GRT 5/10/2021 0:00 $7,141.90 $3,563,808.57

Note that the week of 5/10 hasn’t completed yet and hence the total fees might still increment in the next few days.


I’ll vote yes to this. Huge opportunity to be the #1 DEX for GRT tokens for the upcoming release of their supply. 11.62% being released on June 17th and another large 17.14% on July 24th. Having LM for these two releases can and will be a huge catalyst for LP and volume alike. Would be very shortsighted to not extend on recent price action/volume. I think after these 12 weeks, we can sit back and see how it played out. I think the pool will be in a good enough position by then liquidity wise to not need to extend LM anymore.


Some stats that might assist in a decision:

  • At the start of the last LM rewards program cycle, the pool liquidity was ~1,466,233.19 GRT (~$2,540,859.94), and has since grown to ~9,584,296.46 GRT (~$9,418,736.50), captured on the 19th of May.
  • In the past month, the pool has attracted an average APR of 2.72% corresponding to an average of $2,407.51 in daily fees and an average daily volume of $1,201,346.83.
  • Since the start of the last LM rewards program cycle, the liquidity in the pool increased roughly 3.7 times and the average weekly volume increased 18 times (compared in USD).
  • The GRTBNT pool is the deepest CEX&DEX GRT pool.

With GRT rewards expiring soon, could this proposal be moved to the next round of votes on Snapshot?


Agreed. Any reason it isn’t included for next week?