@ageless What do you mean by “similar return for half the capital”?
An APR is always calculated on the entire capital.
If anything, I would argue that you can get the APR on double the capital now, assuming that the limiting factor is exposure to POOL. Most people will have ETH in their portfolios already.
that’s a good point. I hadn’t thought of lowering POOL pool distribution as part of this proposal. if we cut that down to 50 POOL/Day then five times that would be a much more palatable 250 POOL/day.
at todays prices 250 POOL/day would be approx 2.1 milliond USD over 12 months.
another question that needs to be resolved is how long will this LP reward issuance last? one quarter? six months? I think it is probably good to go with one quarter just to see how things go.
Yes, one quarter sounds good to me. If it’s limited to a relatively short time like that, we can also be more aggressive on the amounts to kickstart the process.
and how you gonna distribute them… on chain or off chain (via wallet snapshot)? Good ex is Robonomics - they incentivize LP providers via off chain distribution of their token.
https://www.robonomics.events/#/liquidity
I like offchain option bc 0 fees for LP providers
I’ve been thinking about it alot and I don’t think POOL pool should be lowered. Being in the POOL pool is becoming less and less appealing already. The fact that a vote can pass and your snapshot vote not be counted along with now reducing rewards. I get the concept that people will jump from POOL pool to LP’ing and that’s supposed to increase APY on POOL pool but I would rather see LP’ing grow and POOL pool continue to grow as well locking up more tokens. Cutting POOL pool drip in half would only save 18,250 POOL per year, I don’t think we need to be so frugal. I support everything else proposed in the reduction and think the LP’ing rewards are very important.
I think you only need one month of LP incentives to achieve decent liquidity. LP farmers beget hodlers that aren’t focused on maximizing yield (no shame @stakeybakey).
I saw in another thread that an exchange was asking for $50k listing fee. If we turn that cost into 1 month of POOL/ETH LP incentives (2,500 POOL @ $20), we will see a dramatic rise in liquidity. I also strongly believe that will create external buy-in (from the POV of non-farmers like myself).
edit: @Torgin I meant to reply to this comment you made: Incentivize the POOL/ETH LPs - #64 by Torgin and not the one this post is technically replying to.
2500 POOL for 30 days is only 83/day. That’s definitely within the budget. This would be 70% APR on the current LP pool size of $900’000. Add that to the 30% APR in SUSHI plus trading fees, that sounds pretty attractive. The APR will go down as more funds are added of course. So I think we can even be more aggressive for a short amount of time.
I’d suggest 150 POOL/day for the first 30 days, then a planned reduction to 50 POOL/day after that.
We can always adjust the later number if need be. Kickstarting the liquidity is the main focus here.
150 POOL/day will initially give LPs 170% APR + fees and gradually reduce as more LPs join.
I like it, front loading it is the way to go. 
Same. I particularly like the idea of flexibility on the rate after one month. I want to acknowledge the possibility that 150 POOL/day may not drive the intended LP behavior and that we may want to raise it after one month. If we have a liquidity goal in mind we should be able to make that decision without controversy. The goal should also include CEX liquidity. I think we should define the goal as the percentage of the total circulating POOL that is liquid on exchanges. Something like 20% of circulating POOL makes sense.
I like the idea.
20% seems excessive though. How did you come up with that number? Are there “established rules of thumb” for what a good level of liquidity is?
I guess our main goal is to facilitate whales moving in and out of POOL without excessive slippage.
Is there any way we can model how much liquidity we need for that to be the case?
Currently a couple ideas guiding that number.
Open to ideas that get us to a more rigorous number, of course.
I agree. The POOL pool already is pretty paltry. I don’t really see why we are being so strict with rewarding holders / LP’rs when we are subsidizing deposits of BADGER with higher APY, for example.
Leave the POOL pool as-is. I suggest making LP rewards 5x the POOL pool. Hopefully, whales exit the POOL pool and its APY increases, thus making it a win-win.
I’d say it generally makes sense to incentivize UNI and maybe Sushi POOL-ETH LPs.
Right now doing any sort of sizable trade has massive slippage, which in turn makes it hard to attract larger holders that want/need the higher level of liquidity to reduce their risk if they need to sell.
Ok I think for the purpose of getting a proposal put together we should just limit these incentives to one month and finalize the POOL/day target. Absent a followup proposal the target drops to 0.
Low end: @Torgin mentions 150 POOL/day
Middle: @ageless suggested 3x the POOL pool, or 300 POOL/day
High end: @RegisIsland and others suggested 5x or 500 POOL/day
I’m compelled to pick somewhere in the middle, observe the effect, and go from there. In term of judging success/failure, I still believe % of POOL as liquidity in DEXs is a good target, because investors typically have a % target they want to acquire. Though it’s difficult to define other than "higher is better."Any suggestions welcome.
This sounds good to me. Do you you have any thoughts on how this might change with Uniswap V3 coming?
Don’t forget guys that an initial high APY will get more people in until there’s an equilibrium until the APY settles at what the market participants are comfortable with, so I would err on the side of higher initial APYs and drum up some excitement.
Regarding V3, I would say it’s a bit complicated and I imagine the only pools that makes sense in the beginning are stable/stable pools, so it’ll be probably 3 to 6 months before all the groundwork will be set up, so for now I think staying on V2 would be better
i agree with you. i think we should go higher in the beggining.
@Brendan do we need to do anything out of the ordinary to create a pool where users can deposit their LP tokens to receive POOL rewards? I am assuming we can just use the regular pool builder and set winners to zero?
I am assuming we can just use the regular pool builder and set winners to zero?
Yes, that’s right. In fact, no matter how many winners there are the pool doesn’t award anything if there is no interest. It just falls back to a staking contract.
From Medium
As such LPs on Uniswap V3 will be given ERC-721 LP tokens, which represent the custom liquidity they are providing. In layman’s terms, each LP liquidity position will be turned into an NFT. This means that will not be as easy to use Uniswap LP tokens in other DeFi protocols and will radically change how you Uniswap interacts with the rest of DeFi.
It seems incompatible with most ERC-20 protocols, including pools here. Uniswap V3 also has a 2 year no-copy clause on it’s code, so it seems SushiSwap is unlikely to adopt their model anytime soon. While the proposed LP rewards will only go for 1 month, focusing on SushiSwap may be beneficial in that we know there aren’t near-term compatibility risks as we bootstrap liquidity.
I forgot about that. It kind of puts the typical lp rewards system in its head. We have some time tho before that really takes place tho right? Can we run a program for a couple months until it actually takes effect?