Bribing our own pools

Proposal Discussion WIP: BIP
#1

The CFT bribes for the CFT/sICX pool have shown that bBALN voters are quite active and that the bribing feature works effectively. As much as I love Craft, we can’t let them continue to go on with no competition haha.

Now that the Bribes UX has been implemented, it’s time for Balanced to do our own bribes. Using BALN to bribe bBALN holders is an excellent use of inflation, as it dilutes inactive voters and non-lockers. It gives active voters that participate in the bribing initiatives a larger share of the protocol, which is excellent, while also rewarding LPs in what the DAO feels is the most valuable pool.

Overall, it directs newly minted BALN to the most valuable members of the community: LPs in important pools and those active in governance.

With that said, I propose the following bribe structure for the next 2 months, then we can revisit.

sICX/BTCB: 4,000 BALN per week
sICX/bnUSD: 4,000 BALN per week
BALN/sICX: 4,000 BALN per week

Total Weekly Bribes: 12,000 BALN per week
BALN released to bBALN participants if we continue the program for a full year: 624,000
Annual Inflation for bBALN participants if we do the program a full year: ~2.5%

Let’s examine possible APY outcomes from this initiative. Let’s assume the most aggressive scenario possible - each pool accrues 33% of all bBALN votes, and all other pools go to 0% of votes. This scenario would result in the lowest possible average APY of the pools.

Total bBALN = ~5.9M
bBALN votes per pool based on scenario: 5.9M / 3 = 1,966,666.67
Annualized rewards per pool = 4,000 * 52 = 208,000
Implied annual rate = 208,000 / 1,966,666.67 = 10.57%

TLDR, the absolute lowest APY you should expect for voting for one of these pools should be about 10%. One of the three might be lower, but then one of the others would be higher, so about 10% floor on average. Imho that’s a pretty nice reward for our active community members with relatively low inflationary impact, and keep in mind, this inflation benefits you as participants.

As always, I’m open to discussion. Is 10% too high? too low? should we focus on other pools? etc.

5 Likes
BIP37: Add BALN bribes for sICX/bnUSD, BTC/sICX, and BALN/sICX
#2

The APY is impressive, higher than what i would have guessed. But 4000 sound like a reasonable start. However i think we could get away with slightly lower in the future, but not sure.

2 Likes
#3

I love the plan, it will accomplish many things…

  1. Rewarding active Governance
  2. Give people a reason to want to lock BBALN for 4 years.
  3. Will draw attention to our stats page and project overall.

Let’s put this idea forward and vote:)

3 Likes
#4

Sounds great overall, but does the BALN/sICX need to be the same level as the others?

The other 2 are money makers, and while we need to support BALN liquidity, we don’t need ‘huge’ amounts of liquidity. I feel a smaller amount for that pool might be better, maybe 2k, making the total a nice 10k

4 Likes
#5

I can see where you’re coming from. I would prefer 4K on the BALN/SICX if it could add even more liquidity there, as it won’t really dilute BALN too much to add some extra liquidity to our DAO token:)

But I can see your point as well.

I

1 Like
#6

Fair point and I’d say I’m ok with 4K/4K/2K. Was considering 5k/5k/2k but can always increase later if needed.

3 Likes
#7

Great to see that the vote has passed. I think this a good start to utilise the bribe mechanism for Balanced. And looking at the stats it is already taking effect

1 Like