I want to kick off this discussion. I am not sure on the technical aspects of this so I will seek guidance on the feasibility as a part of this proposal. Currently, the USDT pool on polygon is using AAVE as a yield source. as part of the yield on AAVE the protocol receives WMATIC mining rewards from AAVE. currently that WMATIC is retained by the protocol. Currently, the WMATIC drip that depositors earn on the USDT polygon pool was provided directly by Polygon, and this drip is set to expire in a few days.
I propose that once the drip expires, the protocol stops retaining the WMATIC liquidity mining rewards from AAVE and redistributes them to all depositors in the USDT polygon pool. depositors would earn about 14% apy at current market rates.
Is this currently technically possible? in my mind this is a stop gap until we get POOL bridged to Polygon. It is also possible that we really incentive deposits there in the future with a dual drip to depositors of WMATIC and POOL.
Part two of this proposal is the protocol lends our current WMATIC “Farming Reserve” on the AAVE market to earn interest and more mining rewards. I suppose we could recursively borrow to a safety factor of something like 1.05 to maximize rewards. this would not be dangerous if we only lent and borrow MATIC on AAVE. If i am missing something please let me know.
Should WMATIC mining rewards from AAVE Polygon be redistributed to depositors?
Use current WMATIC “Farming Reserve” to recursively farm more WMATIC at a safety factor of 1.05
Well each pool would earn its own WMATIC if using AAVE as the yield source there. I guess we could create more pools and combine and distribute the rewards equally among all pools, or each pool earns its own mining rewards based on market rates.
Right now we are distributing 3,571 and we have 59,644 Matic tokens in treasury. If you want to target a 7% APR then we would be reducing the drip to 1,000 Matic per day. That would extend the drip for 60 more days.
The reserve has been turned on for the Polygon prize pool and is currently set to 50% so reserve is now collecting just as an FYI.
Currently we can earn 21.5% APR doing recursive borrowing on our Matic. This is very simple to do with DefiSaver (Aave | Instadapp). I’d advocate that we initially only move 10k of our Matic to the faucet and recursive yield farm the rest. This will allow us to extend rewards a bit longer.
I am in touch with Polygon on possibly extending rewards a bit to match Aave.
Keep in mind that as long as our APR is the same as Aave’s we will be earning back the WMATIC we drip out. So as long as we periodically claim our newly earned rewards from Aave, the drip should be sustainable forever. If we’re going 1% higher than the rate on Aave, that will be our effective burn rate.
I also support recursively yield farming with the majority of our WMATIC.
do we want to drip some of the matic into the pool on top of the new matic thats being donated by Polygon? might attract some more users back into the pool if we can bump up that APR. deposits dropped pretty considerably with the APR.
I wanted to give my knee jerk feedback on the sponsorship drip on polygon. I pulled all my money out of the pool on Polygon. after 24 hours or so the capital has split almost evenly between the prize and the sponsorship. now my odds to win are still crazy low at like 0.004% and I get zero interest on my deposit. 14% APR to move to sponsorship is a reasonable rate, but there are much better opportunities for higher yield elsewhere. I cannot justify being deposited there to myself. If the prize were the size of the USDC pool then i would keep a portion of my money there. i think moving the entire drip to sponsorship takes away from the core principle of PoolTogether. Prize Linked Savings. In my opinion the prizes matter quite a bit. That is what attracted me to PoolTogether in the first place. This further cements my opinion that we should prioritize one main pool to reach our million dollar prize goal. I truly believe that will bring more attention to PoolTogether than anything.