PoolTogether

PTIP-31 300 POOL per day Uniswap V2 Rewards

PTIP-31

Simple Summary

This proposal seeks to determine community opinion on reducing the Uniswap LP rewards from 500 POOL per day to 300 POOL per day.

Abstract

With clear consensus in this forum poll @brendan has graciously said that we can include this change in PTIP-29.

Motivation

Looking at Uniswap V2 volume history for POOL we can see that the incentives and liquidity growth have not been paralleled by increased usage of the LP. In March of this year (before current LP rewards) we averaged $1MM in liquidity and volumes over $500k a day. Now we have $6MM in liquidity and our average daily volume is close to $50k. Compared to many other protocols with similar trading volumes and protocol sizes we have concluded that we are over-subsidizing the Uniswap V2 liquidity.

https://v2.info.uniswap.org/pair/0x85cb0bab616fe88a89a35080516a8928f38b518b

Wrapping this change into PTIP-29 is an attempt at efficiency and timeliness. This LP rewards reduction is also proposed in PTIP-28. However the Polygon planning has proved to have some complexities so it feels prudent to move the LP Rewards change forward into the next vote.

Rationale

The specific number of 300 POOL a day brought forward by @taliskye is a reversion to the original proposal in PTIP-10 by @frown.

This change is not meant to reduce returns for LP providers, as it’s reasonable to assume liquidity will move proportionally and effective yields will not be substantially changed. We can also speculate that reducing emissions could mend the ETH/POOL ratio which has been bleeding for some time and with rising POOL price the incentive returns also increase.

With 200 POOL a day additional treasury budget to work with we can grow the protocol with new prize pools and expand on L2’s like Polygon without saturating the market with more POOL. 200 POOL a day amounts to roughly a 10% squeeze on our total emissions. We can also look forward to utilizing Uniswap V3 which has shown to be 4x as efficient compared to V2.

Technical Specification

  • faucet contract: 0x9A29401EF1856b669f55Ae5b24505b3B6fAEb370

  • parameter: dripRatePerSecond

  • currently: 5787037037037037

  • proposal: 3472222220000000

Status

Forum Poll

*edited for formatting error

  • Yes I approve of proposed Uniswap LP 300 POOL per day rewards
  • No I do not approve of proposed Uniswap LP 300 POOL per day rewards

0 voters

2 Likes

Thanks for pulling this through and getting it bundled with the other proposals.

1 Like

50K per day in volume actually makes me think we should be reducing it by more than 40%.

I also question why we would lump this in with fixing an exploit. “Sure, you can vote against this, but then we’re not fixing that exploit”. :laughing:

I think if you vote against this, you’re just voting against the bundling it in with the drip update and exploit change. So it’ll need to be put in another PTIP or be it’s own stand alone PTIP - which can get expensive with gas, so it’s just easier to bundle as much as possible if the community is generally “for” the item.

2 Likes

thanks @underthesea . i think its great to bundle some of these parameter changes that have broad support.

2 Likes

We should explore moving incentives to Uniswap V3.
Don’t know if that’s possible yet.
For now, reducing drip sounds good.

Voting Started

Voting has begun on this PTIP in a proposal that combines several non-contentious PTIPs.

This proposal includes PTIP-27 Part II, PTIP-29, PTIP-30 and PTIP-31.

:ballot_box: Vote on-chain with POOL
:camera_flash: Vote using Snapshot with PPOOL