Aavegotchi

Author: doxy#2017 Gotchi ID: 3433 Discourse Thread: https://dao.aavegotchi.com/t/liquidity-expansion-options-honeyswap/1845

** PROBLEM BEING ADDRESSED: ** Liquidity for GHST pairs on Quickswap is dropping as QUICK rewards are spread across more pools.

** SOLUTION: ** The 1hive DAO is expanding its Honeyswap exchange from xDAI to Polygon. Honeyswap is live at: https://app.honeyswap.org/

As part of this expansion, they will be incentivizing Polygon trading pairs with their pComb token, including the wETH-GHST pair. See their wiki at: https://wiki.1hive.org/projects/honeyswap/honeyswap-on-polygon Honeyswap farms on xDAI currently yield 10% (USDC pair) to 460% (xComb pair).

To incentivize the growth of this liquidity pool, I propose that we award FRENS to stakers in the wETH-GHST pair at Honeyswap at a rate of approximately 1.2x the rate of staking GHST alone. This rate is between the 1.1x for GHST-USDC and 1.33x for GHST-QUICK available from Quickswap staking.

Discussions between Pixelcraft and 1hive developers will be required to determine whether the mechanism for staking is similar to Quickswap (deposit liquidity, stake LP at Aavegotchi, then stake Aavegotchi receipts at exchange for rewards)

** PROS: **

• Incentives for staking GHST at Honeyswap will increase liquidity available for GHST traders.
• wETH-GHST pair will have a 0.15% trading fee (instead of 0.30% for Quickswap pairs)
• Traders interested in ETH long-term can hold ETH-based pair instead of USDC stablecoin or QUICK speculative token.
• Visibility of Aavegotchi and FRENS rewards to the active 1hive DAO community with a compatible mindset

** CONS: **

• Additional FRENS emissions makes each FREN less valuable
• Potential fragmentation of GHST liquidity with many incentivized GHST pairs
• Additional effort by Pixelcraft to setup the rewards mechanism
• Future value of pComb along with Honeyswap’s potential for success on Polygon is unknown. Currently, Honeyswap has $13M TVL on xDAI; Quickswap has $1.3B TVL.

This proposal was originally described on the DAO forum as an either/or proposition between Honeyswap and Dinoswap. However, discussion and the poll seemed to favor considering each partnership separately.

** IN SUMMARY, this proposal has: More liquidity for GHST and more visibility for Aavegotchi by incentivizing the wETH-GHST pool at Honeyswap with FRENS.