Proposal: LM extension on Stable pools, (DAI, USDC, USDT)

DAO Archive (SUBMITTED)
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This proposal is expected to appear on Snapshot for voting on 2021-07-26T12:00:00Z. Make sure to stake your vBNT for voting before this date and time to participate in the DAO decision.

TL;DR

  1. The LM rewards on stablecoin pools (DAI, USDC, USDT) are extended from 28th of July until the 28th October (another 12 weeks), and can continue being extended by the DAO.
  2. The LM rewards are extended to maintain current stable pools protocol’s liquidity in anticipation of Bancor V3.
  3. To support the flawless migration, a new liquidity mining program will be released together with the Bancor V3 release.

Discussion

  • At this stage, current protocol growth requires LM to maintain the momentum and stay competitive in the space (the DAO seems aware of this).
  • After achieving the position of market leader in both TVL and volume, LM extension will no longer be necessary, and the voting for LM extensions may be concluded.
  • Bancor V3 will significantly reduce the pressure resulting from insurance on all the assets, and should increase the protocol revenue from trading fees.
  • 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.
  • In the long term, Bancor is aiming towards sustainable annual inflation of 2%, in order to achieve that, Bancor requires significant volume and Vortex to be applied.

Summary

  • Bancor should not lose the momentum and cut out the LM rewards on stablecoins.
  • The current LM rewards will be changed together with the release of Bancor V3.
  • Current stable tokens liquidity is essential to stay in the ecosystem to maintain the protocol momentum and support the migration of liquidity from v2.1 to V3.
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So we’re saying 12-weeks is required to bridge to v3? Or would the 12-weeks extension overlap into v3 and use the current timer at the point it was transferred?
Stables are printing the lowest amount of BNT as they have been cut in half twice now. No reason to stop LMR before v3 and lose any more TVL while Large Caps are under-performing and getting 200k BNT printed a week

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This may be a stupid question, but do the pools automatically upgrade from V2.1 to V3?

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We have had three reductions so far on these pools and the current rates (13%-18% at 2x) are inline with what other protocols are incentivizing their stable pools. I think maintaining the LM program on the stables is crucial as the volume that comes through these three pools sometimes even outmatch the ETH-BNT pool which is 5x bigger (~300M in depth) than all three combined.

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its not a stupid question in the least, no idea what the answer is though or if its even been stated.

2 Likes