Decentral Games

Background

The reward rates for the MANA-$DG and DAI-$DG Balancer pools are currently 1,200 $DG/week each. Based on the prior LP Proposal (IPFS #QmUgKo9), Weeks 11 - 40 these rewards rates will be 600 $DG/week each. Likewise, weeks 11 - 65, rewards rate for the UniSwap V2 ETH-$DG pair is 600 $DG/week.

Proposal

Eliminate Balancer pool rewards for weeks 11 - 40 (starting February 9th). This frees up 36,000 $DG (over $2M USD). Allocate ~60% of these savings (22,000 $DG) across 55 weeks to the Uniswap V2 ETH-$DG pool (400 $DG/week). The total LP rewards to the Uniswap V2 ETH-$DG pool would be 1,000 $DG/week for Weeks 11 - 65.

For the time being, the remaining 14,000 $DG this will accrue to the Decentral Games $DG Treasury and remain in the control of the DAO.

Rationale

The Balancer Pools don’t provide incremental liquidity to the Decentral Games ecosystem. Consider a 10,000 DAI → $DG trade via the Balancer Pool: This incurs 8.3% slippage. On UniSwap, since DAI-ETH is extremely liquid, the same single transaction done DAI → ETH → $DG only incurs 1.2% slippage. The same is true for large MANA transactions. By incentivizing even greater ETH-$DG UniSwap V2 liquidity, we actually generate more MANA-$DG and DAI-$DG liquidity and do so much more cheaply.

I’m suggesting we apply the remaining 14,000 $DG to the Treasury for now, but do think this should all be applied back to LP as originally intended. There’s some interesting discussion around QuickSwap where we could add a L2 liquidity; other options include simply extending LP rewards past the 65 week mark or increasing ETH-$DG UniSwap V2 rewards.