At the time of writing, Matic is ranked #68 on coingecko with a market cap of almost 1B.
Matic has a daily total trading volume of over 500m usd.
Despite having volume metrics this high, very little of this volume occurs on chain.
This is because matic is illiquid.
Having less than 4m usd of liquidity on uniswap, Matic has managed over 3m usd of on chain volume consistently since the beginning of february.
While matic has a native staking solution, the apy is PATHETIC, at just 4%.
I believe that by allowing a coinvestment limit of 1m bnt for matic and assigning LM rewards, we can capture almost all of this 3m usd+ daily volume that matic receives on uniswap.
Matic is already whitelisted on bancor, and the current coinvestment budget has been consumed.
Matic holders will likely chase the higher apy offered by bancor and fill this 1m bnt coinvestment budget quickly.
Because matic is primarily traded on CEX, the volatility is not impacted by gas prices… If this pool were sufficiently liquid, bancor would capture significant arbitrage volume.
This is low hanging fruit.
This proposal is up for discussion! I will be putting this idea to vote in a couple of days.
We should be chasing these types of promising projects. Their current staking solution is so weak it would bring huge liquidity. This + many others are needed.
There are some arguments in your proposal, but not strong enough. Metrics? Any model? Assumptions?
I have researched and the apparently the current APY for staking Polygon (Matic) is close to 13% (stakingrewards.com calculates up to 25%).
You are right saying that the total trading volume is around 500M - most of that in CEX. Uniswap without any incentive captures between 3M and 5M.
I don’t think that we will get 100% of the trading volume from Uniswap, as you say, to be honest. 1inch gets a small volume far less than 0.5M. What strategies will you use to bring those users over? Adding LM rewards will probably bring liquidity providers, not necessarily users to exchange the token. How would you bring them over?
The assumption here is that because the vast majority of trading volume is on cex, cex trading activity is the primary directional driver.
If we create sufficient liquidity for matic, then game theory suggests that bancor (much like uniswap now), will capture significant arbitrage volume based on off chain volatility.
My aim with this proposal (or any similar proposal) is not to bring new users to bancor… but to increase bancor selection, liquidity, and volume.
When i checked matic’s site before writing this post, 14% APR was advertised.
A 1m coinvestment from bnt coupled with further incentives for Matic holders to fill the matic side of the liquidity pool can create this high liquidity environment and begin creating volume / revenue for bancor that doesn’t currently exist.
Edit to add:
I think that we should stop thinking about bancor as a dex and start thinking of bancor as defi’s premier liquidity provider.
Bancor is liquidity as a service. It doesn’t necessarily matter who taps into this liquidity, as long as the liquidity is being tapped. There are countless other crypto assets aside from matic that are essentially low hanging fruit and can fulfill this role.
As bancor expands its liquidity and offerings, more volume will come. Whether that be arbitrage, direct users, aggregators, etc…
Thanks. And yes, by users I meant projects tapping into the liquidity as well. I am not against per se, but if there are other “low hanging fruits” then maybe it would be wise to do an integral proposal / analysis to further expand the LM reward program. If we do individual initiatives, we miss the overall strategy.
I think you should propose coinvestment and LM rewards separately. They are separate actions. I want to ask you a serious question. First, please put together a list of all the tokens you would like to incentivize with LM rewards. Then, estimate the total inflation that this would generate.
It is good to add incentives to get capital into the protocol, but you can’t shoot from the hip. Be concrete. You need to show some thought process other than “lets incentivize everything”.
I am generally okay with incentives for well known projects that will gain liquidity and reputation for the protocol. PLEASE stay on page one of coingecko with your suggestions. I think it would do the protocol well, reputation wise, if you did this.
Do not spam the governance. If your prop fails, respect the decision. Do not put it on chain again. It costs gas to vote.
I want to be conservative with LM rewards. I want specifics drawn up, and I want to know the real cost in terms of inflation.
I would suggest you to pick maybe 10 coins you think are good targets. Argue a case here, and then put them on chain one by one. Rook was premature to add. At some point LM rewards do more harm than good. Personally, I think your approach of just putting things on chain is too aggressive.
I agree. I am tired of the Messiah LM proposals, and I think they are becoming damaging. There needs to be a plan other than “lets add LM rewards for everything Messiah thinks is good”.
I strongly encourage a penalty for failed votes. That will bring up the discussion level, and provide a disincentive for @Cryptomessiah to spam.
Once again, majority disagree with you… i’ve had 3/4 of my proposals pass with overwhelming support… im sorry that you’re upset by my ambition…but im not here to appease you. I’m here to grow bancor. The merits of my proposals will continue to be tested, on chain, as intended by the dao.
If you have an issue with this, feel free to join any others who agree with you by voting no on my proposals.
The issue is you publicly asked on twitter to start a secret group for vBNT holders. 50k+
Please don’t act like you aren’t aware of how this appears to the inner and outer Bancor community.
While, yes I agree Matic is a good choice. I think the issue might be how we/Bancor award LM rewards moving forward as this practice is going to continue pre loading bags, then filling up all our liquidity space for like 10 ppl. Thats BS
Is there anyway we can “Tie” vBNT to accounts and limit the amount of X token they voted for in the previous proposal? Or if say you vote 1000 vBNT towards a yes in a proposal, then you have to stake 100 BNT in the same pool if the same account wants to participate in it?
So for instance if Bob places x amount of vBnt yes votes into a proposal, then they cannot add that same amount of the proposed token for a certain set amount of time to allow non incentivized actors to participate in LM and thus to limit the amount of liquidity positively motivated actors have added, unless they add the equal amount of BNT to the pool they voted for. Which would open up the equal amount for Single LP side, non BNT.
Maybe not the most complete idea/ thought but just trying to come up with ways to avoid LM proposal hi-jinks.
I would agree with the concept of receiving a penalty each time a failed proposal is
Made. That way we keep the governance structured and only see well thought out proposals with proof of doing good for the protocol itself. We can’t just keep bringing random proposals, this might harm the bancor protocol in the long term. I have nothing against matic, it’s a promising project but as a general comment: As the protocol is growing, the lack of rules and structure in the governance system is starting to become concerning. @mbr@MichalHerzyk Could we work on something like that?
In general, I would rather governance be open and fair. Penalizing failed proposals also raises some very severe regulatory questions about actively disincentivizing governance. I would need to consult our lawyers to get a definite answer, but I am 99% certain this would be illegal.
I am thrilled to have @Cryptomessiah take the lead in creating and pushing proposals out. He is guilty of nothing more than being an active contributor to the DAO.
In general, I think the quality of the proposals can be improved slightly; however, this is a minor ciriticism. I think these proposals are clear and to-the-point, and adherent to the proposal guidelines set forth in BIP3. Again, some room to improve the presentation and readability - maybe we can work on that together.
