[FIP 009] - Rewards for Phase 4 (III)

I would argue that instead of using USDC, we should try to partner with an algo stable pegged to USD, that is minted through CDP.

As mentioned before I like the Alchemix and Abracadabra community, so could try alUSD or MIM as they both also still have rewards to distribute.

Would be totally against Unit Protocol (USDP).

If this project will succeed it needs adoption. We can use Defi and lock up periods to extend the runway for that. However the only real way for it to take off is through partnerships. Just creating liquidity pools with various protocols aren’t real “partnerships”. Where’s the management team in developing those?

Can some of the voters of FLOAT-FRAX explain to me why they prefer this over FLOAT-RAI?

After conversations with various Community members and going through the chat on this proposal here is an idea with some numbers to it:

So there would be three pools:

  • 200 BANK per week to BANK-ETH sLP
  • 400 BANK per week to FLOAT-ETH sLP
  • 200 BANK per week to FLOAT-USDC (Uniswap v3 + Low fee)

With the following multipliers for staked deposits:

1x by default
1.25x at 8 days
1.5x at 16 days
1.75x at 24 days
2x at 32 days
2.25x at 40 days
2.5x at 48 days
3x at 60 days

These multipliers could be tuned over time depending on market conditions.

Potentially the addition of a BANK-only pool acting as a savings account esque pool (~20 BANK per week)

This should act as an onboard into to FLOAT from centralised stablecoins as well as reward those who hold out for the long term. Keen to hear thoughts before moving to vote :slight_smile:

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Excellent direction @JohnWinstonL thanks for sharing your thoughts. Big fan of this approach.
Happy to expand on why this proposal makes a lot of sense in my mind:

  1. The addition of a USD-stable coin & FLOAT pairing brings a huge amount of utility via basic pair, I’m thinking of this pair as one of the “killer apps” for FLOAT. Quintessentially, this is about converting centralized stables to decentralized stables at the click of a button, and making this easier for traders across the board with added liquidity is highly positive.

  2. Incentivizing community growth via market-neutral strategies, is a feature I’d say is an absolute must for us at this point considering market conditions. The FLOAT-USDC pair would not only bring utility to the protocol, but it would provide powerful incentives that wouldn’t result in price exposure to LPs, therefore dissuading BANK dumps through lock multipliers as well as the potential BANK-only pool.

  3. Lock multipliers are a very good way for launched, early-stage protocols to retain a degree of safety and attract higher-conviction supporters and LPs. Definitely not mutually exclusive with @paulm 's ideas on additional incentives relating to bonds being used to boost the basket, etc. I believe the multiples are competitive yet not overly aggressive compared to other lock-multipliers available across the space right now. So the numbers on this look good, but we should be open to tuning these numbers as the protocol progresses and continues to develop.

I particularly like the long-term approach to FLOAT-USDC as from a trader’s perspective, you’d be looking at market neutral returns which then could be compounded through longer term holding. This would be massively important in this market, where BANK volatility is almost a given until we bring more features and adoption to the protocol. On top of that, if the BANK-only pool gets added, it’d be even better for ones looking to maximize returns through the FLOAT ecosystem. Long term believers in FLOAT would receive higher incentives than practically anywhere else in the market right now. This would be monumental for the protocol IMO, and one of the strongest G2M strategies I could think of right now.

As to BANK-ETH sLP and FLOAT-ETH sLP, keeping incentives (as well as liquidity) on those would be extremely important and the proposed numbers make a lot of sense to me.

Props to the team on putting thoughts into this.
Would happily vote in favor of the above proposal.

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Questions/comments about this approach:

  1. Can we get double incentives, inclusive of Sushi Onsen, on these pools if they’re staked? I’m not familiar enough with the programming to know if that’s possible. To max out returns for stakers that’ll be needed.
  2. The reason why I like the Bank only pool idea is that it minimizes impermanent loss issues. FLOAT is relatively stable, by design, but still is influenced by ETH so that combination is relatively benign. Same obviously with FLOAT-USDC. However we’ve seen huge instability with BANK and with only the option for our BANK tokens to hold and earn return (other then price appreciation) as staking it with ETH that’s a high risk to anyone, including those of us active in the project. I, for one, wouldn’t want to risk my ETH with possible further deterioration in a pool with BANK where there’s no other support for that coin, which there isn’t right now. The solution is a BANK only pool with a good interests rate. I’m worried that without it we’ll see all arbitragers and newcomers to continue to dump BANK as they earn it… which is not what we all want. From that perspective I think a BANK only pool is even more valuable then a BANK-ETH pool, which needs some liquidity but not really that much. Can we include a BANK pool here with significant rewards?
  3. Other protocols have long hold periods for stake multipliers. Also, I think this is a bit more complicated then it needs to be and too short term. And unnecessarily so. How about 0.5x gradations with longer hold periods that are progressively longer? (Also, why 8 day increments? It seems like an unnecessary complication to me.) An alternative staking structure that’s simpler, longer term, and less generous up front but more so longer term:
    2x at 30 days
    3x at 60 days
    4x at 120 days
    5x at 365 days

Hey @fasterdriving really good points here.

  1. Curious about that too. I’d defer to more experienced devs here who might know more about Onsen integrations than me.

  2. You make some good points on market dynamics favoring a BANK-only pool over ETH-BANK. At the moment. In the long term however, when BANK price stabilizes, I would assume ETH-BANK would be a lot more important utility wise, thus prioritizing incentives and liquidity there in my mind will be a higher value-add and potentially better use of rewards and incentives. I’d be more interested in seeing the protocol incentivize utility (BANK-ETH with higher liquidity would allow for easier entry points into protocol governance, etc) rather than incentivizing pure hodling in the long term. Having said all of that, I completely see how a low interest BANK-pool would be almost redundant. I’ve been thinking that including a mandatory minimum lock-up with higher rewards could be a good compromise for a BANK-only pool.

  3. It’s a lot easier to impose longer hold periods when there’s a ton of supply-side liquidity waiting to go in. veCRV 1-4 year lock periods make a lot of sense when you’ve got $7.6b TLV, much less sell pressure, and a lot of reasons to keep that capital patient (airdrops, etc.). I do believe that as the protocol matures (I’m sure the team have been hard at work on delivering new features and ideas), we should look to bring these rewards to longer timelines. I do think that lock-ups on smaller-cap protocol tokens should be shorter as to not completely dissuade participants from getting involved. These additional rewards are there to counter-act the BANK dumps but still flexible enough for new participants to test the waters without being locked in for too long to see returns. As to the exact timelines, I’m sure the 8-day increments can be changed to 10 days or even 1 week, team will probably share their thoughts on that.

Keen to develop these thoughts further with you and everyone else on here!

Very good inputs from both of you @fasterdriving @Lior_EdenBlock .

  1. Agree. We should check if we can get sushi onsen rewards.

  2. I would prefer if the Bank only pool has rewards which scale over time more than the over pools or we have a long minimum lock up time. 30days?

  3. I agree we should stick to a bit longer intervalls and reduce the complexity.

Proposal:

1x by default
1.5x at 15 days
2x at 30 days
2.5x at 45 days
3x at 60 days

I would support more simplified lock multipliers but would prefer for a longer period, namely:

2x at 30 days;
3x at 90 days;
4x at 180 days.

Approx 6 months lockup time is a very long runway for DeFi in general.

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I like the idea of reward multipliers for lock ups.

However turning the bank-only pool in some LOW rewards savings account feels like backstabbing all community members that didnt dump their bank rewards.

The Bank only pool should have possible lock ups and multipliers aswell. Also the ability to top up the bank only pool. Otherwise dump fest for bank will continue.

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To answer that, what about only introducing the highest multipliers in this BANK-only pool with the longest lockup?

Or only allow say 2x rewards on all other pools. This may buy some time for the devs/community to market the protocol / implement integrations to further boost usage/price, and so on.

I like the idea of a long time lock up for bank only with high rewards. That would actually create some buy pressure.