I feel like it’s difficult to figure out what the ideal amount of rewards to give out are, so we used the Uniswap LM program as a benchmark for how much to distribute. They distributed 2% over 2 months, and we wanted 1 month so we guessed that 1% sounds reasonable. It’s even harder to reason about when there is no price, so maybe best to go with following other examples that seem reasonable.
It’s not unrealistic. I definitely think we should have a go at it in the future since it seems to be something that alot of people want, regardless of whether or not this proposal passes. It will probably require a new audit and so on, so I doubt there will be enough time to tweak the distribution function this time around.
I agree it’s difficult to pick an exact amount for allocation. I think that compared to uniswap, which greatly benefits/gets derisked by larger LPs (as small LPs present larger risks to LPers), ribbon doesn’t benefit as much from immediately scaling up the vaults (depositors aren’t at a higher risk of a bad weekly return if the vault is smaller). As a result, it might be advantageous to tweak incentive rates to focus on a longer, perhaps slower LM.
I can’t know for sure if 0.5% or 1% or 2% per month is the best, just trying to think of the marginal benefits compared to uniswap’s position. TBF you’re right that 1% is really not that much in scheme of things, but there is something to be said about starting smaller and maybe increasing it for the next round of LMing if 0.5% isn’t enough to max out the vault caps.
I agree that we should start Liquidity Mining since there is alot of hype around ribbon right now and this will let us keep some momentum. But i also think we need to iron out the details of distribution and how to make it fair and not able to be gamed.
In favor of this Proposal and your logic re: need to run some form of a user acquisition program.
The reward rate seems reasonable as a first volley to test the waters, but as others here have expressed, there does seem to be some valid concern around the impact the present vault caps will have on who is able to take advantage of this offering (existing users Vs new entrants). Still, this is something you can measure and hopefully see the trend positively grow with V2.
I propose another possible change - locked liquidity mining
Why: As mentioned above, the liquidity mining program should be a program of utility. Rather than just pushing TVL up, the below proposal adds a study of users as well.
Proposal: Adjust liquidity mining incentives into two pools:
Regular LM (0.25%)
Locked LM (0.75%)
Locked LM requires any staker to stay in the pool the entire of the LM program; leaving the pool prior to the end of the program will result in 0 earned rewards. The “slashed” rewards will be returned to the pool and distributed pro rata to the other locked LM holders
Benefits: This will allow us to study several user journeys:
Basic LM stakers
Locked LM stakers who failed to last the entire term
Locked LM stakers who lasted the entire term
Following the LM program, Ribbon team could issue a survey to study the behaviors or look at on-chain analytics tools to identify why specific users trend toward different types.
Yes, we are discussing internally updating the rewards accrual so that you only get rewards if you stick it out through that week’s option lifecycle (mint → settle)
We are modelling our staking mechanism after Synthetix (linear), which is battle-tested. We see this
more as an experiment to see what happens wrt some key metrics, and less as an official program. But definitely is a good idea for a potential future LM program.
The main purpose of liquidity mining program is to attract more users by giving them high APY. But since RBN is not traded anywhere, it is not possible to have a price and thus the rewards wont have APY?
If that’s the case, then I don’t see how this can attract general mass in participating the program. Speculating on the future price of RBN might proved to be too complicated for normal people.
I suggest having the liquidity mining program after RBN is transferrable and has a market price
I think LM while having non-transferable tokens is a great idea!
Additionly, I’d like to propose quadratic staking so that those with larger amounts don’t eat up the majority of supply. While it can still be gamed i think it would be a step in the right direction towards a fairer LM program to reward smaller stakers who may have missed out on the airdrop.
My points/arguments against these goals through LM , not against this but just doing some argumenting for the sake of the discussion
Vault TVL will come with a simple vault increase , no need for LM
The people who are involved with the project and who participate in this protocol have voting power , only 400/1,2k or smth actually voted , we say “expanding voting power” but are we really doing so? Will these new holders vote ? Or just wait for listing and dump ? Majority of the LM will just be people in here getting more tokens IMO , won’t attract many new people
People can simply remove their teeth in the game after a week
Well, we are specifically trying to deter mercenary folks who are just here to farm and dump based on some APY number. I am a strong believer in doing this before the token is trading, so that we can incentivize people who actually want to accumulate RBN instead of farming and dumping.
Things have been trending upwards organically, but that doesn’t mean we should not try to accelerate it. I think it will be an interesting experiment to see what happens if we add more incentives.
Who knows! This is data we want to collect, and we will need to actually run the experiment to collect that data.
Agreed, and maybe we want to see how many people do that – so that we can design more effective programs in the future.
I fully support this proposal and think LM when the token is not tradeable incentivizes those that want $RBN to participate in goverence and those that believe in the long term value of the token.
Since this is an experiment, if there were to be another LM program following I think exploring
would be an interesting idea. By then there would have already been the airdrop that was geared towards early supporters, a LM program for those in the vaults (that could be consumed mostly by whales), and a third quadratic LM program would cater towards smaller accounts that still might want to have a say in the goverence process.
Additionally as judged by the last snapshot vote, and the discussions in this forum, governance is already seeing really strong activity, incentivizing smaller accounts might keep this going…
Thanks for the response and I Agree , I should have thought about it all from a more experimental point of view , definitely makes sense to pass this and try it out for future reference.
Is it necessary to make the system that complex with locked LM and other disincentives mentioned?
I mean 2% withdrawal fee itself is a big disincentive already, and it is the highest withdrawal fee I know across all defi protocols.
Ribbon protocol will be a profit machine, if a user decides to sell RBN it is her call but trying to game the system that much to avoid RBN selling and keep the price up doesn’t make sense to me.
Making the system more complex doesn’t mean it is getting healthier.
I am pretty much in favour of the initial proposal, which seems well designed already.