We’re shortly heading into the fourth week of liquidity mining on V2. The early pools are growing well, but as debates have been taking place among the Ballers Committee plus wider governance, a recurring challenge has been that there are pools we’d like to experiment with incentivising, where the Tier 3 BAL allocation (2,500 BAL per week) is too great of an allocation or risk.

This is slowing some of the progress in migrating LM rewards from V1 to V2. This proposal was initially published to the forum, and following discussion the below final proposal was agreed.

PROPOSED CHANGE

This proposal is a simple update to the current Tier system which was previously approved by governance, and was as follows:

    Tier 1 (T1): 15,000 BAL (4 slots, total of 60k BAL per week) - Pools where strong liquidity is paramount, e.g. for acting as hubs by connecting liquidity in order routing.
    Tier 2 (T2) : 5,000 BAL (10 slots, total of 50k BAL per week) - Strategic pools, e.g. having strong potential for high volume given high liquidity.
    Tier 3 (T3) : 2,500 BAL (14 slots, total of 35k BAL per week) - Promising pools, e.g. containing newly launched tokens or small cap projects (unproven potential for high volume).

This proposal passing would replace the above 3 Tier program with the following 4 Tier program:

    Tier 1 (T1): 15,000 BAL (4 slots, total of 60k BAL per week) - Pools where strong liquidity is paramount, e.g. for acting as hubs by connecting liquidity in order routing.
    Tier 2 (T2) : 5,000 BAL (9 slots, total of 45k BAL per week) - Strategic pools, e.g. having strong potential for high volume given high liquidity.
    Tier 3 (T3) : 2,500 BAL (12 slots, total of 30k BAL per week) - Promising pools, e.g. mid caps, and experimental pools that have proven significant traction in Tier 4.
    Tier 4 (T4) : 1,000 BAL (10 slots, total of 10k BAL per week) - Experimental pools, e.g. many-token pools, newly launched/small cap projects, early stage partnerships.

In practice this means that 1x Tier 2 slots and 2x Tier 3 slots will be used to create a new Tier 4 with 10 slots.

The committee will then typically add new pools into Tier 4, measure success and then bump those which are successful up, and similarly move pools down from Tier 3 should it make strategic sense.

BENEFITS

There are a number of significant benefits members of the committee can envisage from this additional tier:

1. The committee can run more liquidity mining experiments with lower risk. As it stands, the minimum we can allocate is equivalent to ~$75,000 USD per week, which is a large amount for a small project or pool structure which may not for some reason attract sufficient liquidity & trade volume.
2. More pools can be incentivised overall. This should help us to migrate more pools from L1, and mean we upset fewer L1 LPs who suddenly lose all their rewards.
3. The committee can more easily setup LM partnerships with other smaller cap projects, where dual LM incentives are offered.
4. Tier 3 pools which for some reason no longer warrant the 2,500 BAL/week can be downgraded, rather than completely excluded.

All other aspects of the Liquidity Mining program would remain unchanged. Should the vote pass, the new Tier 4 slots will be available for the Liquidity Mining week starting June 21st 2021, at 00:00 UTC.