Bancor

TL;DR

This proposal is an addendum to the original proposal for the dual LM rewards program, and the addendum that extended the cut-off date from end of March 2022 to end of April 2022.

• An estimate to Bancor 3’s release for “late April/early May” has been provided in the last community call. Therefore, an extension of the Dual LM program until the end of May is justified so that teams, projects, and DAOs can commit tokens for Dual Liquidity Mining once Bancor 3 is live.
• In Bancor 3, external token projects can incentivise their own communities by providing liquidity incentives in their own TKN.
• To garner fast adoption, bring awareness to the External Liquidity Mining rewards tool, and lubricate the transition from Bancor v2.1 to Bancor 3, this proposal seeks to match external team’s liquidity mining incentives in dollar value at the time of token commitment, up to a maximum of 50,000 BNT, emitted over a 24 months schedule.
• The matched BNT will be emitted over a 24 months schedule. The 2-year duration is chosen with a long term view in mind.

External Liquidity Mining feature

External Liquidity Mining will be a new feature available on Bancor 3’s Phase 0 release. Blog post about v3 at https://blog.bancor.network/introducing-bancor-3-962a3c601c25 and Mark’s presentation on V3: Bancor 3: Dawn Phase 1 Keynote @ DCentral Miami - YouTube.

Liquidity Mining is a convenient tool to bootstrap liquidity with proven results. Figure 1 and 2 show the pool balance increasing significantly after LM rewards were activated, and finally stabilising at a higher TVL than before the program started. Figure 3 shows the Liquidity Share for the FARM pool increasing once LM rewards were activated, and stabilising at higher values.

Figure 1 - WOO pool balance over time. LM rewards started at the end of May 2021.

Figure 2 - FARM pool balance over time. LM rewards started at the end of July.

1600×383 121 KB Figure 3 - FARM Liquidity Share on Ethereum.

Matching the rewards on TKN with BNT rewards means that less BNT is needed for Liquidity Mining compared to v2.1.

Since the announcement of Bancor V3, there has been strong interest among white listed tokens to offer LM rewards. Migration to V3 can be achieved in a single click via the Bancor app. The liquidity incentives discussed here are an important component in stimulating users to migrate from v2.1 to Bancor3.

To accelerate the adoption, and help raise awareness for this feature, each white listed token that commits to their own auto-compounding rewards program, the BancorDAO will match the emissions value up to a maximum of 50,000 BNT.

There is no requirement that the token and BNT LM be on the same emission schedule; however, the BNT emissions will be non-negotiable and fixed over a 24-month period.

To receive the BNT rewards, LPs need to stake their LP tokens in a rewards contract. Decision on the rewards emission schedule is purposely open-ended and will be proposed and decided at a later stage by the BancorDAO.

In conclusion, the Dual LM rewards program seeks to:

• Incentivise LPs to migrate from Bancor v2.1 to Bancor 3.
• Increase awareness of the External Liquidity Mining feature.
• Attract more LPs from different communities to stake on Bancor and get familiarised with Bancor3 features.
• The BNT emission schedule has a long-term view in mind.

FOR

Accept the addendum to move the cut-off date from the end of April 2022 to the end of May 2022.

AGAINST

Continue with the previous dual LM rewards proposal with a cut-off date at the end of April 2022.