Trader incentives discussion

[tfns]

I noticed there is only one topic discussing trading incentives about tiered fees so decided to make a more generic one here. This topic’s purpose is to provide a space for the community to convey and brainstorm ideas around rewards/marketing solutions to attract more trader volume to Bancor.

A couple of ideas just to get the discussion starting:

• A trading competition to reward the highest trading volume wallets on Bancor in a certain time frame.
• Subsidising trader gas fees by awarding a certain amount of $BNT per trade (BAL is implementing this as a PoC for now).
• Airdrop for traders that used Bancor during a certain time frame.
• Create posts comparing trade fees on Bancor against other Descentralised Exchanges and post them on relevant channels, be it Social Media posts or targeted ads.

I think that after the UI has been reworked is the best timing to release trading incentive schemes. Origin pools will also help drive low-cap coins’ volume.

Please feel free to comment on the ideas above and suggest your own.

[tenzent]

I particularly like the Balancer model for trader incentives, though the bancor team has mentioned they are working on their own trader incentives program. It could work something like this though (based on BAL Model):

• A campaign is established with a maximum of, let’s say, 100,000 BNT. All Whitelisted Pairs are Incentivized.
• The Rewards are given out as trading occurs on the platform covering all or partial gas costs when trading occurs directly through bancor rather than through a router. The rewards are first come first serve.
• Incentives could scale up with the # of trades done by the same wallet to promote continuous trading. like for the first transaction 50% of the gas fee could be covered with each trade adding 5% more for the next trade. i.e if you trade 11 times this would be the covered cost for each trade in order 50/55/60/65/70/75/80/85/90/95/100. This could be reset for every round to deal with some of the inflation.
• When the BNT runs out the DAO votes to renew adjusting parameters like BNT rewards, % of gas fee covered, etc.

[philipeachille]

@tfns

awarding a certain amount of $BNT per trade

I think this is quite a feasible idea, as it is not much different from what LM is to LPs. Maybe reduce LM rewards slightly and that BNT goes to traders (“the other side”). That would increase the return from fees for LPs, making up (some of the) the difference

[glenn]

I think this a good idea but should be scoped towards small trades (although I am not sure how difficult that would be to implement). I think one of the issues that we have at the moment is that even though we provide the least slippage on certain trading pairs (due large pool depths) and lowest fees; traders are still deliberately using other DEXes (Uniswap/Sushiswap/etc…). This wouldn’t be a problem for us if everyone just used an aggregator (1inch, paraswap, matcha, etc…) since the aggregators would route the trade to the pools that give the best outcome (less slippage/fees/etc…) and traffic would naturally come in our direction (this already happens to a large extent).

Large traders are most likely already using aggregators or seeking out arb opportunities across multiple exchanges to make profits (they already use Bancor directly or indirectly). The folks that we want to attract to Bancor are the everyday folks that are using uniswap/sushiswap because they are not aware about our platform. These folks are probably making small trades and hence fees/slippage is not that important to them since the dollar amount that they are losing is relatively small or they are just simply unaware.

A few ideas that I think will reach this targeted demographics:

1. Kick back a small amount of BNT to any trades made directly via our platform within a certain dollar amount (e.g. $50-$1000). The larger the trade the more BNT you get which would be cap at an amount (e.g. 1 BNT max for a 1K trade, .5 BNT for $500 trade). We can advertise this via existing social media channels.
2. We are already listed on coinbase and coinbase is great gateway for people that are new to the Crypto scene. A coinbase earn campaign would attract new users that would otherwise not know about Bancor.
3. I saw a mention in our telegram about doing a quest via rabbithole. This platform let’s folks earn crypto by performing some actions. Uniswap/Compoung/Aave ran some campaigns using this platform in the past and appears to be a good way to reach out to users.

[bavi]

The balancer model would definitely increase the trading volume but the real questions is if the increase in trading volume will actually outweigh the cost to the protocol, as BNT would be inflated again. Balancers volume is still relatively small, even after the introduction of the gas fee reimbursement. I actually made a post yesterday about introducing a lottery to incentivize trading on bancor: Valueable NFT lottery to incentivize trading

[tfns]

I like the NFT lottery idea and it’s a very cost effective marketing strategy. I would vote for it.

I’m also a big fan of the rabbithole quest!

[tenzent]

i think its a fairly inexpensive good way to attract some volume i see no reason why we wouldn’t do it.

[Acer]

I like the idea of trader incentives. I imagined incentives for communities as well. So the community with the highest volume could have like an APR boost, similar to the multiples when holding in a pool. Bringing more of those community members to the pool to trade. This way, we can incentivize an entire community. Perhaps there is a standing of 3 spots. Example, Highest gets 2x second 1.5x third 1.25x

• Create NFT trophies for those who win.

[Jefe-fintechv1]

I like the idea of rebating gas, and particularly the tiered rebates based on # of trades the trader executes.

I also like the NFT idea.

What if we tied a trading volume competition to Liquidity Mining Rewards thereby incentivizing a community to direct trade execution to Bancor? For example, the top 3-5 communities that increase their trading volume the most would trigger a restart of the Liquidity Mining Rewards (“LMR”) for their LPs for some limited time and set amounts of BNT. First place would get the most rewards/multiplier and/or duration, etc. This may even create buying pressure as these communities buy BNT to stake in their LPs.

[mbr]

Gas rebates might be problematic. It’s certainly possible, but may not be the answer we are looking for. A more sustainable approach, and priority for L1 is simplifying the contracts.

Alternatively, moving to a less gas-intensive chain, or onto L2 (Arbitrum) are also feasible routes to attack the gas issue.

[DFV]

Obviously any and all effort to speeding up L2 take priority to this. But if we need an interim solution:

1. Perhaps we can subsidise with an end date (ie. till L2 is complete)?

2. I’ve been hounding on lowering fees to out compete Binance(even for 1 single token, like ETH). But now that I think about it, the Eth transfer fees will make it unsustainable. Am I right? We just need to beat binance on one coin and we’ll be able to bring traffic across, allowing people to discover the yields.