Proposal to extend LM rewards in MKR/BNT Pool

Proposal to Extend LM Rewards on MKR /BNT pool

TL;DR

  • As of now Pool has $23M, and is in our top 10 in terms of total value.

  • Fees generated from swaps are still low as of now so likely will lose most of the MKR participants when LM ceases

  • Current APR is the highest pool for BNT holders at the moment as a %, so it’s a good pool for us BNT supporters

  • propose extending LM rewards in current state for another 12 weeks

Thoughts?

2 Likes

I think these are more reasons not to extend it than to extend it. Shows that there is a lack of interest by both people trading MKR and BNT stakers.

4 Likes

I vote no. If the pool isn’t performing, not a great use of LM

3 Likes

The MKR pool has a 0.5% swap fee. How about dropping it to 0.2% so it is more competitive with other DEXs.

3 Likes

happy to try anything that doesnt cost BNT

1 Like

Probably not a great candidate for LM extension; however, could be an excellent candidate for some pool fee tinkering. I see @Sjwill is looking at a drop to 0.2%. Might be worth a try.

I will pull some data from the pool later today, and see if we can get a clear picture of our ‘before’ shot.

1 Like

In the end of the day, nothing sustainable survives without good competitive swap fees. Should reduce them, but maybe half the LM rewards or extend for a short time to incentivize people to stay after swaps are reduced

1 Like

If it doesn’t get traction kill them after a little longer. Perhaps a 4 week extension with reduced swap fees

1 Like

Making the fees competitive is a good idea as we are essentially pricing our selves out at the moment. We are not the pool with the highest liquidity and hence don’t have much market power.

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The above doesn’t count Uniswap V3 which has 15M in liquidity on the MKR-ETH pair:

Compare to us at ~23M:

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The fees for these pools are set between .16%-.3% at the moment. I think that even at .2% that we will be pricing ourselves out as the hop from ETH-BNT trading pair would put us at .35%. If the ETH-BNT pool fees go down to their original value (.10%) then we would be at Uni/Sushi levels (Balancer v1/v2 are at .2% and .16% respectively) if we set the fees to .2% on this pool.

I think that going down to .1% is better for this pair as right now anything that’s above ~$800 doesn’t go to us even if you are swapping BNT-MKR through 1inch:

that’s wild. It would much rather swap the BNT to ETH and go somewhere else. We don’t come into the picture again until the swap is ~550K:

and even then we are only getting 10% of the trade. I will emphasize again that this is BNT → MKR swap and intuitively one would expect trades between $800-$500K to come in our direction when swapping directly (that’s not happening).

2 Likes

That is crazy! Definitely an argument for doing something dramatic. We should do a systematic analysis of all our medium to large pools like this. If we aren’t competitive on a one leg swap, we deserve to fail.

2 Likes

In order to not pollute this proposal with fees discussion, I started Proposal: Lower MKR-BNT Fees to 0.1%. This will allow the community to consider the merits of extending LM on MKR separately from changing the fees on this pool. I will add some data about fees/volume stats on this pair later on today and how that compares to some of the other pools that have had LM rewards.

2 Likes

Since the week of 5/17 to now (roughly 35 days) this is the amount of fees collected for this pool and others that have had or have an ongoing LM campaign:

symbol total_fees
REN $44,138.60
OCEAN $44,944.94
GRT $52,754.60
UNI $55,202.14
BAT $66,479.79
ROOK $87,298.11
ALPHA $117,590.87
WOO $133,954.12
AAVE $142,191.17
SNX $148,400.33
MKR $156,616.77
YFI $160,653.50
wNXM $199,299.34
ENJ $341,082.63
MATIC $887,341.10

The weekly fees for this token has been on the declined since 5/17:

which amounts to the following volume:

I don’t think we need to vote on this proposal yet and we can punt this vote to next week since there is still 12 days left. I wonder if we might see an increase in volume should the following proposal pass:

This should also give @mbr time to pull any data from his end.

1 Like

I moved this back down from level 2, as it is not yet in a suitable format.

  • Add a date for snapshot.
  • Delete the “Thoughts?”, as the inference is the subject is still being discussed.
  • The proposal is probably acceptable for Snapshot after these two changes alone; however, it may be beneficial to strengthen the document a little.

Hello,
I wanted to bump this up to see if it is worth discussing again to extend LM rewards for the MKR pool. What are thoughts and why?