DOUGHpamine Incentives Program

Fee would apply on the LP tokens staked in the farming contract, so the “initial” amount.

xDOUGH is definitely something cooking, and could become complementary to this incentive program by possibly replacing the escrowing part…

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A snapshot vote will be on for 3 days from Today 9pm UTC:
https://snapshot.org/#/piedao/proposal/QmbAkKEa1jdiByzdTjnx5R6ap4cJoNoCuB9uErSZ219Hk1

Vote will be consider final either:
after closing
or
→ anytime before closing, as soon as the expressed preference cannot be changed by outstanding votes

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Two items to add to the discussion albeit a little late:

  1. Can we remove the withdrawal fee in Period 3? This will allow LPs to withdraw without penalty in case incentivized pools are changing.

  2. Consider waiting until Uniswap v3 release on May 5, 2021 or start on Uniswap v2 if there will be a migration?

2a) If waiting for Uniswap v3, incentivize the existing Balancer PLAY/ETH pool for the time being before moving to Uniswap v3.

one late comment here. from an inexperienced baker.
with sushi operating on the xdai network, why not incentives pools there to help make interacting with pieDao products more affordable and accessible.

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Hé, great to see a proposal like this! Improving liquidity for the pies would be great.

Same for increasing the utility of $DOUGH, though I view that as secondary, and it seems the DAO has plenty of funds.

I’m not sure I’m on board with pairing pies with $DOUGH, but will immediately admit I feel like I’m out of my depth here.

Making liquidity for pies depend on how well the project is doing can create a positive feedback loop as much as a negative one. I also don’t see how this would make LPs want to hold DOUGH after incentives come down. They would be forced partially through the escrow but this only delays selling, it doesn’t incentivize holding, secondly, it’s known upfront, knowing I can’t compound reduces my expected yield. Not sure I see any reason for LPs to keep holding DOUGH once incentives decrease. Therefore, I see this mostly unlock liquidity from, and provide benefit to, current DOUGH holders, but not attract new ones.

I don’t see how creating an LP with DOUGH in it increases the correlation between the two asset prices. They become more responsive I’d expect, but not more correlated. How do you expect the correlation to increase?

I could see myself be completely wrong about all this though, and doing it with PLAY actually sounds like a great test. So I’ll vote in favor. If this doesn’t help liquidity and liquidity proves unloyal or unwilling to commit I imagine we should think more about what would make an LP want to pair their already valuable tokens with our pies and what would make someone want to hold DOUGH, although again, I’m not sure what the direct reason would be to do so right now. If we go that direction other projects show great suggestions, payout bits of fees earned (xSushi), unlock protocol benefits (Alpha).

Thanks for sharing this proposal building towards a bright pieDAO future :pray:!

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Sorry, I am a bit late to the game here. I am all for it, I like Sushiswap. There is a significant amount of cost in transaction fees when moving out of the Balancer DOUGH/ETH pool, then into the Sushi pool. Is the cost of this going to be covered by us, the contributors? I guess, I just hate having to pay all the transaction fees to move. Especially, since I just placed a significant amount more DOUGH/ETH into that Balancer pool.

Right now, the DOUGH/ETH pool on Balancer has approximately 9.5 million. I have YPIE/ETH on Sushiswap, and over there the Liquidity is under a million.

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New onchain vote is up to transfer the required DOUGH incentives for periods 4 / 5 / 6
https://client.aragon.org/#/piedao/0x109b588a4f2a234e302c722f91fe42c5ab828a32/vote/339/

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Every time before I create a liquidity pair I check the risk with https://www.impermanent-loss-calculator.net

New onchain vote is up to transfer the required DOUGH incentives for periods 7 & 8

client.aragon.org

3 Likes

New onchain vote is up to transfer the required DOUGH incentives for periods 9, 10 & 11 (new period starting tomorrow)

https://client.aragon.org/#/piedao/0x109b588a4f2a234e302c722f91fe42c5ab828a32/vote/344/

2 Likes

As part of the DeFi Indices revamping initiative the DAO is planned to cease the current incentives on both the DeFi+S/ETH and DeFi+L/ETH pools on Balancer.

Here below a summary of current incentives paid by the DAO (20% liquid, 80% escrowed).

It looks evident how, despite the overall shrinking of the liquidity provided by LPs, the weighted average annual “cost” (aka. incentives) for single $ of liquidity provided sits at $0.71, reaching picks of $1.52 for pools as the PLAY/DOUGH on Sushi. These incentives clearly account for a big portion of the residual DOUGH selling pressure on the market.

In the attempt to better preserve the overall DOUGH value, I’m proposing the following:

1) Reduction of the annual avg. cost for $ of liquidity to an initial target of $0.60 (see allocation below)

2) Promotion of the BCP pool (staked BCP - single side) with increasing incentives base on the # of units of BCP staked.
The BCP represents in fact the main liquidity smart-pool for DEFI++, so in light of the upcoming promotion/rebranding of our own DEFI index it could be wise to better incentivise its liquidity provision, which clearly comes with NO IMPERMANENT LOSS for LPs, while also representing a concrete opportunity for them to collect swap fees from the 3 pairs represented (DEFI++ <> ETH, DEFI++ <> wBTC, wBTC <> ETH).

By considering its annual cost of liquidity, it’s quite evident how BCP represents the most capital-efficient liquidity pool incentivised by PieDAO, hence this proposal.

NOTE: Nominal DOUGH issuance will keep being subject to the deflationary trend voted as part of the DOUGHpamine program (5% reduction every 200k blocks).

Looking forward to hearing your thoughs before moving this to vote!

4 Likes

What do you think about the proposals above?

  • YES for both proposals 1 & 2
  • YES for proposal 1, NO for proposal 2
  • YES for proposal 2, NO for proposal 1
  • NO for both proposals 1 & 2
  • More info needed

0 voters

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Has there been any thought about ways to more drastically improve liquidity at lower inflation? It seems this program is both causing the sell pressure you noted and also pie holders have reported poor liquidity and significant slippage. In combination, it seems this program is not optimally effective. Are there good alternatives?

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Some time ago I suggested that there be a PIE that has underlying liquidity positions that are allocated to where PieDAO sees need for liquidity. This could make DOUGHpamine obsolete, however I expect that some of the DOUGHpamine emissions be redirected instead to holders of this new PIE.

3 Likes

Yes, good point. These proposals should in fact be framed more as initial steps in that direction, given that the DAO has anyhow to adjust the current issuance due to the planned removal of the +S/+L incentives.

Aside of the above, a bunch of initiatives are currently considered and will be discussed on dedicated posts:

  1. Displacement of the current DAO owned liquidity from the Balancer DOUGH/ETH pool (80% of the current pool, or $ 0.5m at current value) to a new Uniswap V3 pool.
  2. Possible optimisation of the incentivized liquidity in more capital efficient pools. As briefly pointed above, a smart-pool construction like BCP could well favour this. For instance, by introducing a PLAY allocation in BCP, through the proper incentivisation of a single product (BCP) the DAO could potentially address all liquidity needs for its current pies offering. This somehow also reconnects to the proposal by @margin here, with the difference that with an index of “LP positions” liquidity would anyhow be less concentrated given the need to incentivise also the “other side” (most likely ETH) of each LP pool resulting in minor depth for the same amount of total liquidity, and also considering that this index of LP position should be an additional product.
  3. Other new forms of liquidity optimization actively part of the ongoing R&D.
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Thanks for these suggestions @gabo. I’m inclined to vote Yes on the proposals but chose “More info needed” because I want to emphasize one aspect you mentioned, the “residual DOUGH selling pressure on the market”. It seems like our overriding goal should be to reduce this sell pressure. If we don’t, then three years down the road DOUGH won’t be worth much.

In trading the #1 rule is “Protect capital”. We can make improvements in the complex infrastructure today but if we don’t support the long term DOUGH price then it’s all for naught.

PieDAO is not alone in this. If you look at other DeFi protocols most show a steadily declining trend. But we should ideate on how we can reverse it.

I’m sure we’ve all thought about this. Every time I hit the “Compound” button I look at the date. Three years in crypto is an eternity :slight_smile:

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Thanks @kitblake for pointing this out. As mentioned in a comment above, this proposal should in fact only be framed as an initial review of the DOUGHpamine program, while the overall sentiment would anyhow be to progressively wind down such incentives in favour of other forms of liquidity provisions which won’t end up suppressing dough price

A snapshot vote is now open.

3 Likes

New onchain vote is up to transfer the required DOUGH incentives for periods 12, 13 & new periods 14 & 15 (still to be started)

https://client.aragon.org/#/piedao/0x109b588a4f2a234e302c722f91fe42c5ab828a32/vote/345/