Proposal: Extension of Liquidity Mining Rewards on the LINK pool ahead of Bancor 3

DAO Archive (SUBMITTED)
1

Proposal: Extension of Liquidity Mining Rewards on the LINK pool ahead of Bancor 3

This proposal is expected to appear on Snapshot for voting on 2022-04-02T23:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

TL;DR

  • This proposal is part of a series of proposals to extend LM in the wBTC, LINK, ETH, USDC, USDT and DAI pools.
  • The LM rewards schedule for LINK is due to end in less than 2 weeks.
  • To maintain LINK liquidity until the launch of Bancor 3, this proposal seeks to extend the LM rewards program on the LINK pool for a further 8 weeks or until Bancor 3 is released.
  • LINK would continue to receive emissions of 100-200k BNT per week, for an additional 8 weeks or until Bancor 3 is launched.

Discussion

  1. LINK is the 3rd deepest pool on Bancor, representing roughly 81% of staked LINK on Ethereum and 20% of Bancor v2.1’s TVL.
  2. Sustaining liquidity in the LINK pool is essential to maintain the position of the Bancor protocol on the market.
  3. The LINK pool brings a significant share of the volume of the ecosystem, and also presents reasonable impermanent loss liability.
  4. LINK pool’s weekly volume and fees, as well as liquidity share, are shown below in Figures 1, 2 and 3.

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Figure 1 - Weekly LINK fees, since the beginning of July.

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Figure 2 - Weekly LINK volume, since the beginning of July.

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Figure 3 - Staked LINK Liquidity Share on Ethereum.

Summary

  1. At this stage, current protocol growth requires LM to maintain the liquidity on Bancor v2.1 ahead of Bancor 3 launch.
  2. After the Bancor 3 release, the LM rewards in the LINK pool will end until the DAO votes on a proposal to activate them again.
  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.
  4. Extension of LM rewards on LINK for 8 weeks will provide 800,000 - 1,600,000 BNT as rewards, depending on the multiplier.

FOR

Continue LM rewards on the LINK pool, at 100-200k BNT/week, until the launch of Bancor 3.

AGAINST

Do not extend the LM rewards in the LINK pool.