Polygon USDT Pool WMATIC drip

1

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.

Edit
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?
  • Yes
  • No
  • Unsure

0 voters

Use current WMATIC “Farming Reserve” to recursively farm more WMATIC at a safety factor of 1.05
  • Yes
  • No
  • Unsure

0 voters

2

Perhaps the WMATIC already earned from AAVE can also be included in the drip?

3

I’d rather use that for something else. Perhaps the protocol can yield farm even more WMATIC on AAVE with it.

1 Like
4

This is very easy to do; because we’re already doing it! Just need to transfer the accrued WMATIC into the faucet.

I think the question here is really should be launch more pools and spread the WMATIC across them?

2 Likes
5

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.

6

For the record we’ve accrued ~55k of wMatic as of today.

7

Does the pool is big enough to create a reserve like on eth network ?

8

We turned it on today!

1 Like
9

bump

The faucet ends today, so we need to take action.

I propose we tune the faucet so that the APR matches USDT on Aave. Aave is currently yielding 7.3% APR of WMATIC. We could set ours to 8% (a little headroom for growth)

  • Set the Polygon USDT faucet to 8% APR
  • Do something else (add comment)

0 voters

10

I want to clarify a couple of things here:

  1. 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.

  2. 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.

  3. 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.

  4. I am in touch with Polygon on possibly extending rewards a bit to match Aave.

11

so this would be ten days of drip at 1000/day right? are you guys going manage claiming farmed WMATIC after the ten days and make sure the drip doesnt dry up?

edit
i definitely support yield farming with it.

12

Yes, exactly. That is what we would do.

2 Likes
13

If you want to target a 7% APR then we would be reducing the drip to 1,000 Matic per day.

No, you misread. I said 8% so that it’s higher than Aave.

I’d advocate that we initially only move 10k of our Matic to the faucet and recursive yield farm the rest.

I’m happy to transfer only a portion back into faucet. If you want to yield farm with the rest, I can transfer the remainder to you.

14

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.

15

Deposits leave USDT pool with 7% yield with around $300 prize. we can try Curve(up to 25%yield) or some other sources for better yield.

16

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.

@Leighton

17

There is no new matic being donated by Polygon. The Matic that is being dripped (1,000 per day) is coming from what’s accrued to the protocol.

I think we wait until at least June 15th to make any more changes. At that point the super aggressive Matic rewards on Aave will end so that should change the economics a good bit.

Right now I like having a rate that is more sustainable.

18

Ok. I thought that was coming from polygon again. :+1:t2:

19

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.

4 Likes