Changes to Lightning Liquidity Mining Program

Summary:

  • Increase ZWAP / ZIL (pool 2) mining rate
  • Don’t inflate other pool rewards when there are insufficient qualifying tokens
  • Reduce round time to 30 days
  • Reduce minimum vote threshold to 10%.

Abstract:

This proposal seeks to better protect ZWAP LPs who are the main protocol stakeholders to as well as to make it easier to introduce new incentivized pools, or adjust reward weightages.

Motivation:

The newly updated rewards are insufficient to incentivize deployment of capital by ZWAP LPs in Zilswap. As such, we propose re-increasing the ZWAP/ZIL pool incentives from the next epoch according to the schedule in the Specification section.

Further, we propose delegating all unused incentives to the ZWAP pool instead of distributing them to the various other pools. Should the proposal pass, the new weightages should be retroactively applied based on the previous voting results in the next epoch.

Next, to allow the community to more quickly adjust Zilswap incentive structure, as well as allow upcoming projects to rapidly join Zilswap with an incentivized pools, we propose reducing each mining round to 30 days (or more accurately, 4 epochs). This means that the next voting round will happen in 3 epochs, with the next pool rewards updated after the 4th epoch concludes.

Finally, to ensure lesser known tokens also have a good chance to get an incentivized pool, we propose lowering the voting threshold from 15% to 10%.

Specification:

The new specification for liquidity mining will be as follows:

16 tokens pairs will be eligible to receive ZWAP liquidity mining rewards at point of time. Every 3 weeks, the eligible list will be re-evaluated to ensure that there is maximum capital efficiency for the ZilSwap ecosystem and a governance vote will be proposed to decide on the pool rewards. After every 4th epoch, the new incentive scheme will be enacted.

Every week, there will be 6,250 newly-minted ZWAP tokens allocated to liquidity providers on ZilSwap. The distribution of the 6,250 ZWAP tokens will look like this:

  • ZWAP/ZIL token pool
    • Total 3,500 ZWAP
  • High-cap token pools ( Market cap > 100m)
    • Total 1,500 ZWAP
    • 5 pairs maximum, 300 ZWAP per pair
    • If there are no 5 pairs, reallocate remaining to other pairs in high-cap. If there are no pairs at all, reallocate all to ZWAP pool.
  • Mid-cap token pools (5m < Market cap < 100m)
    • Total 1,000 ZWAP
    • 5 pairs maximum, 200 ZWAP per pair
    • If there are no 5 pairs, reallocate remaining to other pairs in mid-cap. If there are no pairs at all, reallocate all to ZWAP pool.
  • Low-cap token pools (Market cap < 5m)
    • Total 250 ZWAP
    • 5 pairs maximum, 50 ZWAP per pair
    • If there are no 5 pairs, reallocate remaining to other pairs in low-cap. If there are no pairs at all, reallocate all to ZWAP pool.

To be voted into each category as stated above, each token in that category has to garner at least 10% of the total votes casted for that category’s proposal vote. Otherwise, the reward allocation will be redistributed as specified above.


This will change the current rewards to:

ZWAP: 2077 ZWAP -> 3500 ZWAP
gZIL: 1452 ZWAP -> 1500 ZWAP
XSGD: 1452 ZWAP -> 1000 ZWAP
PORT: 165 ZWAP -> 125 ZWAP
ZLP: 165 ZWAP -> 125 ZWAP

Note that gZIL is moved to the high-cap category.


Please indicate your inclination below. If there is enough support, we can move to a formal snapshot vote.

  • For
  • Against

0 voters

9 Likes

No what the hell we voted for it to be once every 90 days not 3 weeks stop being greedy and trying to change something we voted on already

We have $0 in the ZWAP/ZIL pool. The objective of reducing the round time is to ensure exciting upcoming projects like Pillar Protocol ($DAI for Zilliqa) and other Zilliqa-supported ecosystem projects are able to get into a voting round quickly instead of waiting 3 months.

6 Likes

Man you make some dumb polls seriously we have already voted it’s 90 days I used my zwaps towards that vote.

Would make this voting system a mockery you just want to change it for your own gain

I’m not sure how is it “for my own gain”, please stop the baseless accusations. The whole point of this system is that we can also vote for changes and improvement for the better, rather than having things set in stone. Vote “No” here and later on with your $ZWAP if you disagree.

FYI, I’m the creator of Zilswap.

5 Likes

The threshold to 30 days - Absolutely. Make that its own proposal and I’m sure the community would be right behind that.

The rest kind of feels like the developers of ZilSwap have realized that in its current guise their token has limited value and are trying to claw some back by inflating its reward pool artificially again.

2 Likes

Disagree on limited value. Zilswap V2 and various projects upcoming will blow your mind, but that’s another conversation altogether.

Just based on pool rewards, we have an abnormally low ratio for the native gov token. See PancakeSwap and SushiSwap for e.g.:

For PCS they have 40x multiplier allowing them to support a 75% apr with a whooping pool size of $700m.

Sushiswap uses a similar 20x factor.

By comparison Zilswap native pool has extremely low rewards, and adjusting it downwards further was a mistake.

6 Likes

Sounds like a great change to make. Is the 15% allocated to dev is now allocated to LP?

Say XSGD (and one of either PORT/ZLP/Pillar) all join gZil in the high caps in the next voting reward, you believe 3,500 to ZWAP and 500 to those are a correct breakdown?

I understand your argument looking at Pancake and Sushi but I can do things with those tokens. The Cake I earn is put to work and therefore has the ability to have that elevated status.

I ask - What does ZWAP give me that compares to cake or sushi currently?

I appreciate your argument will most likely be wait to see what V2 has to offer. You will know what V2 has and that may need this breakdown to be sustainable. Currently however, that isn’t public knowledge, as far as I am aware. How do you expect people to vote positively for what is coming in V2 when it isn’t known?

Ultimately, this could (possibly should) be a proposal that is voted through, however the timing of it does seem inopportune.

3 Likes

Great change. I support it and I hope it will accelerate the Zilswap development process because people are getting bored honestly.

1 Like

a noble sacrifice that is welcome. but i do think there is no real reason to drop xsgd pool rewards. it had always started as the highest yielding pool to incentivize people from providing a stable coin within the ecosystem. balance in all things.

1 Like

Agree, need to support the value of ZWAP. By doing this ZWAP price will go up so all pools will win

2 Likes

To piggy back. If you want to use pancake and sushi as examples then we should be allowed to stake ZWAP to earn tokens. It gives ZWAP more utility if there were ways to earn tokens using ZWAP. I say we should go that route then trying to reshuffled the rewards again.

Also +1 on having the voting time as a separate proposal. Honestly a monthly round sounds much better than every 3 months.

2 Likes

This idea is the one

I will support the proposal but I understand that those providing liquidity on the XSGD are exposed to heavy IL. In general, stablecoin pools tend to have a good reward ratio for this reason. Nevertheless, I also understand that those holding the ZWAP token are carrying a big risk compared to gZIL/ZIL/XSGD.

Regarding the utility of the token: I assume things will evolve over time and ZWAP will find its place. At the moment who decides to hold the token is betting on the future of the platform and giving a vote of confidence. Therefore a high risk-high reward, at this stage, is justifiable.

1 Like

YES
For the smaller pools, keep in mind, it is better to get 125 ZWAP at 5K than 165 ZWAP at 3K.
ALL reward pools rely on the price of ZWAP.

2 Likes

Appreciate the proposal, especially, reducing time frame to 30 days for voting. However, maybe treating stable coins separately for ZWAP rewards would be a good idea, as stables serve the non-speculative aspect on the exchange, and we just have XSGD at the moment. Reducing rewards for XSGD (considering possibility of heavy IL in a bullish market) can reduce liquidity of the pair, and thus negatively impact the usage of ZilSwap.

2 Likes

I agree with everything apart from further reducing the low cap pool.

I understand there is need for change, but 165 zwap rewards were removed from the low cap pool last week and allocated to the zwap pool. Now a further 80 could be removed.

In my eyes it would be fairer for the PORT & ZLP rewards to be locked in at 165 zwap for the remainder of season 1.

2 Likes

veryagree.

i have 26 zwaps. I support this.

I don’t agree at all and chase raz is right about this proposal its not a good idea

1 Like