Uniswap V3 Liquidity Mining Rewards

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Uniswap V3 Liquidity Mining Rewards

TLDR - Polygon WETH/POOL LP incentives on Arrakis.finance

The Finance Team has been looking for different possibilities to incentivize a Liquidity Mining program for Uniswap V3. After careful consideration, we have decided that the best protocol to launch this program would be Arrakis Finance. Arrakis has far higher adoption than any other protocols offering similar services on top of Uniswap V3.

We will be running our pilot campaign on Polygon. With Polygon we have a strong community of POOL holders and a friendly gas environment. Low gas lowers the barrier to entry and ensures people can get in and out of the liquidity pool with ease. Similar to our pilot of POL on Polygon this gives us a chance to familiarize ourselves with the opportunity as a community.

We have deployed our Arrakis vault for WETH/POOL in a relatively wide range of 0.000275 WETH/POOL to 0.0011 WETH/POOL. This allows for POOL price volatility without price easily leaving the trading range. Current price is 0.00052624 WETH. Like our protocol owned liquidity, this range is set to the .3% fee tier on Uniswap.

Community members participating by LPing WETH/POOL will be incentivized with POOL rewards. For the pilot 1000 POOL will be distributed over 30 days. If we reach a cruising altitude of 33k POOL or more in total liquidity value then we will look to continue this incentive program.

The current plan is to start this campaign the week of November 14. Please share questions or opinions here and stay tuned for an announcement for launch.

How to participate

Navigate to our vault on Arrakis.finance to add liquidity. Claim POOL awards as they accrue. Add more liquidity if you are so inclined or withdraw anytime.

Technical details

Vault 0xEC6402eD9C402CCaE4EBBA7Ff48445865760ce2F

Proxy 0x8ff0ff88797be3a05e66456ec3ce8bfb96d6962c

WETH/POOL Uni Pool 0x88d6391e22125d8ed820b9ecc03c6e44fb87232a

Incentive Gauge 0x0fca3755B1DE447D15F8414f83FA650da255020F

References

@bravenewdefi previous post re: Arrakis

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Great work, thx for doing that, already added some liquidity and excited for the rewards! :smiley:

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We have reached our initial goal with Polygon liquidity on Arrakis.

Goal 33k POOL or more in total liquidity
Currently 42,800 POOL value ($28,849.24 TVL / $.674 POOL price)

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We want to increase incentives from 250 POOL per week to 450 POOL per week targeting 60k POOL in incentivized liquidity. We would start the program with the new year and fund for 90 days at which time we could re-evaluate in conjunction with TBR quarterly renewals. The funding for the 450 POOL per week is requested in our TBR proposal coming live next week.

Because the Arrakis UI has given us some problems (that 83% APR is not right) we are looking at using a V3 staking Prize Pool. A prize pool will be more fun and Poolers like prizes! Persons wanting to participate would add liquidity on Arrakis and deposit their Arrakis token (tokenized V3 liquidity) to the prize pool for a chance to win the 450 POOL each week. The POOL would be split into 10 prizes.

Please share any feedback you have on the program thus far, and thoughts you have on the plan to continue for 3 months and run the incentives through a prize pool.

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LGTM! I like the idea of prize-pooling the LP tokens. Its a more ‘Pooly’ way to do things.
PoolTogether v3 still has its uses :slight_smile:

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Thanks for the update and good work on maintaining the program so far! I have participated in the program and liked it.

I’m a fan of using prize pools to distribute POOL rewards. I always liked the Polygon POOL pool, too.
By using them to distribute LP rewards it feels that smaller liquidity providers might potentially lose out. Would it be an option to split rewards and have a POOL drip + a weekly prize?

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We could do a POOL drip, but I think with 10 prizes it’s not necessary. Creating a drip for the smallest Poolers would result in dusty amounts, instead with only prizes they get a chance for an outsized win. Here’s a look at the composition of the pool and how it would relate to prizes or drips.

We currently have 13 participants and they are represented by ~1700 stArrakis tokens. Of those 13 holders, 3 have less than .5 tokens. These people are presumably hoping for some outside incentive, why, I don’ t know. If we dripped POOL to them they would get 450 POOL / (1700 / .5) ~= .13 POOL per week. If they hit a prize they get 45 POOL. Prizes are good for small minnows!

There are 5 other Poolers that have < 50 tokens. With 25 tokens a Pooler currently has roughly 1.5% of the pool. My low effort odds math says thats something like 1 in 7 chance to win every week. We guarantee this program for 12 weeks…

Note that none of these napkin calculations include the expected growth of the pool. Will some people LP and win nothing, yes. But I think the drip would be pretty inconsequential for them as well. Because of the added complexity to add a drip and the scale at which we are operating this I think it’s better to just focus on the fun of prizes.

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I also support moving to a prize pool instead of the current drip model!

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Hi all. I regret to inform you that the prize pool plan for Uni V3 incentives on Arrakis / Polygon is being paused. We were on schedule to be up and running on the 1st but in the process of testing the new prize pool we ran into some unexpected issues with the stRAKIS token. We would likely need to use the vault token instead of the staked token, which adds steps and has no user interface solution ready. Given our experience thus far with Arrakis, and the complexity of a prize pool setup for both LPs needing to migrate, and new LPs wanting to add liquidity, we feel it’s not worth the endeavor at this time.

We WILL continue the current 250 POOL per week incentives on beta.arrakis.finance until further notice. We are encouraged by new solutions being developed in the space and will keep an eye on opportunities to expand our community liquidity program.

For those currently providing liquidity or wanting to do so please feel free to share your perspective on these matters here or with BRONDER and I on Discord. Thanks

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Hey, thx for the update! :slight_smile:
Sad to here but totally understandable, Arrakis works fine but here and there it still feels a bit buggy, e.g. since the POOL price crash it does not display the current price correctly for me.

But nice to hear that the current incentives continue! :slight_smile:

Btw. what is the plan for ETH ?
I am not providing LP on ETH and do not plan to (too much fees) but want to know if you guys think we should extend to ETH or think if it is needed? I know that we have a big POL position thx to your work in PTIP-82 (PTIP 82 - A foundation for protocol owned liquidity) and personally it does not feel like we need much more, just asking out of interest :slight_smile:

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We will be doing a 90 day report this month on the Mainnet Protocol Owned Liquidity and considerations for going forward this month.

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