Proposal: Incentivize users to migrate to V3 by matching token side LM rewards with up to 50,000 BNT per pool

DAO Archive (SUBMITTED)
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Proposal: Incentivize users to migrate to V3 by matching token side LM rewards with up to 50,000 BNT per pool. Available once per pool - offer open until the end of March 2022.

This proposal is expected to appear on Snapshot for voting on 2022-01-09T00:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

TL;DR

  • External token projects can incentivise their own communities by providing liquidity incentives in their own TKN.
  • To garner fast adoption, and lubricate the transition from Bancor v2.1 to Bancor 3, we propose to match external team’s incentives up to a maximum of 50,000 BNT, emitted over a 24 months schedule.

Incentives for TKN teams to use the Auto-Compounding rewards mechanism on Bancor3.

External Liquidity Mining will be a new feature available on Bancor 3’s Phase 0 release. Blog post about v3 at Introducing Bancor 3. Bancor 3 marks a New Day for DeFi — one… | by Bancor | Nov, 2021 | Bancor and Mark’s presentation on V3: Bancor 3: Dawn Phase 1 Keynote @ DCentral Miami - YouTube.

Liquidity Mining is a convenient tool to bootstrap liquidity with proven results. Figure 1 and 2 show the pool balance increasing significantly after LM rewards were activated, and finally stabilising at a higher TVL than before the program started. Matching the rewards on TKN with BNT rewards means that less BNT is needed for Liquidity Mining compared to v2.1.

Since the announcement of Bancor V3, there has been strong interest among white listed tokens to offer LM rewards. Migration to V3 can be achieved in a single click via the Bancor app. The liquidity incentives discussed here are an important component in stimulating users to migrate from v2.1 to Bancor3.

To accelerate the adoption, and help raise awareness for this feature, each white listed token that commits to their own auto-compounding rewards program, the BancorDAO will match the emissions value up to a maximum of 50,000 BNT.

There is no requirement that the token and BNT LM be on the same emission schedule; however, the BNT emissions will be non-negotiable and fixed over a 24-month period.

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Figure 1 - WOO pool balance over time. LM rewards started at the end of May 2021.

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Figure 2 - FARM pool balance over time. LM rewards started at the end of July.

FOR

Allow for BNT LM to match externally provided token LM up to 50,000 BNT per whitelisted pool.

AGAINST

Don’t activate any BNT based LM rewards.

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There seems to be an implicit suggestion that V3 will be up and running a bit before this offer sunsets at the end of March. Given that the timeline for the precise rollout of V3 is unclear, perhaps it would be better to have this offer running for say 4 or 6 weeks from when V3 goes live?

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All sounds great to me ! Just one detail regarding this:

Should there not be a dollar minimum so whitelisted tokens cant just start a 10$ LM Campaign and receive 50K BNT

I think what tfns has on the proposal is better, we usually expend around 50k bnt per campaign, expanding the lm to be spread over 2 years give us better prospects for long term LPs.

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excellent proposal - will be hard for anyone to resist dual LM and no IL

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The BNT LM rewards will match the external team’s incentives in dollar amount so I don’t think having a dollar minimum is required but happy to hear your thoughts.

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I think what @Sjwill is suggesting is that we don’t close this offer at the end of March of 2022 as has been proposed. I agree with this sentiment 100% since once B3 is out we should have a lot of publicity from the DeFi community about the new version of Bancor. There will certainly be new and old projects that will come to us for whitelisting and also migrate their LMs over to us. At that point in time, a lot of them will no longer qualify for this proposal. I see no reason for us to not extend this offer until the middle of the year since that should give projects plenty of time to look at the new Bancor 3 protocol (once it releases in Q1) and consider moving their LMs to us (and qualify for this offer when that happens).

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@tfns,

How will this work from a TKN side LP perspective? Say, I deposit TKN and get bnTKN in return. This bnTKN will have auto compounded fees (from swaps) and also rewards (assuming the team is running LM campaign with us). This bnTKN will then have to be staked into a separate rewards contract (is this something we would create) that will emit $BNT to these LPs over the course of two years?

Thanks for answering this. I was going to ask the same question as well.

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I got the impression that TKN protocols could deposit TKN to get BnTKN (LP token), then they could gradually burn the bnTKN and so increase the underlying TKN represented by the other TKN depositors.

Or am I mistaken :thinking:

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The TKN protocols deposit tokens on their pools for LM rewards. The LPs on the TKN side will then receive these rewards plus fees auto compounded automatically (when they burn their LP tokens they get more of the underlying token in return than their initial deposit). The token project can decide the rate at which the rewards will be emitted and based on that can determine when they will run out. Alternatively, they can also do an exponential decay with a decay rate of their choosing.

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Yes, that’s correct!

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Happy to work on an addendum to increase the Dual LM rewards cut-off date. We can move it to the end of April if you think that sounds reasonable.

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