Reduction of small/mid cap lightning rewards to increase high cap and zwap/zil pool

Summary:

Reduction of lightning rewards by 30% to give to large cap incentives for stability

Abstract:

Can we please reduce the low cap lightning rewards? I appreciate the desire to support them but I feel the ratio is already significantly too high. This will incentivize zil and high caps.

Motivation:

Low cap lightning rounds are being increasingly gamified and this will impact the quality of zilswap with perception of coins like bolt.

Specification:

Reduce allocation to low caps for ZWAP.

For: enable tons of random low cap coins which may or may not be valid in any way, shape or form. As we have minimal vetting of coins, plenty of pumped their small cap and then dumped accordingly - leaving their users impacted.

Against: risk not enabling a token with a new use from being valued enough by the lightning rewards. However, those if they grow should be able to no longer be in the lightning rewards.

Poll:1) Reduce small and cap lightning rewards by 30%, re-incentivize zil/zwap and high cap
2) keep lightning rewards as present
3) other

4 Likes

I’m not against this, but we need a better structure for Lightning going forward.

One way is to use Allocation Points (APs) to decide which pool gets what.

For example:

  • Total = 100 APs

Then:

  • ZWAP/ZIL gets 50 APs;
  • Any high-cap can get 5 APs max (25 total if 5 pairs);
  • Any mid-cap can get 3 APs max (15 total if 5 pairs);
  • Any low-cap can get 2 APs max (10 total if 5 pairs).

The lowered threshold to qualify in each category is lowered from 15% of total votes to 10%. So, it is easier for tokens to qualify. If no 5 tokens qualify in any category (i.e. Only 4 qualifies in mid-cap), the remaining APs goes back to ZWAP/ZIL pool.

3 Likes

I don’t know if this is the right place to add this but I really liked your original rewards idea, as in the 3-2-1 system

what you may like to change is instead of the rewards being split between the remaining pairs in the group if there aren’t 5, they are re distributed from the top down

for example high cap have 2 pairs, Port and Gzil, 400 each, 1200 left, zwap get half 600, high cap gets 300, mid cap 200, low cap 100,

mid cap have 2 pairs, xsgd and ZLP, each pair has 550, 1650 left, zwap get half 825, high cap 412, mid cap 275, low cap 137

same goes for small cap… depending on voted pairs.

just a thought

1 Like

I am fine with the concept here yes, but the ratio is going to be important. I would still put high-cap at like 35 and mid/low at 10/5, so as to not devalue the high caps. It would disincentivize the small a little, but they can come up with their own ideas (like Port).

2 Likes

I am in favour of this proposal.

I think incentivising too many small coins doesn’t make much sense. Those coins have their own supply and the project itself can subsidise its own LP. It’s ok giving them some rewards but shouldn’t be a big number of ZWAP.

Instead, ZWAP LPs I believe are those reinvesting their weekly rewards into the pool and this reduces sell pressure on the token.

3 Likes

Hmmm I think this is fine too. The biggest problem I’ve seen so far is that people get confused how the ZWAPs are allocated if there is shuffling. Best not to make the APs floating numbers.

We can discuss the APs next week. Looking at CAKE distribution, it seems that they do just 1-2x AP per token. Only when there’s a syrup pool, meaning token project giving a small % allocation of their token supply to CAKE stakers in these pools, then the AP for that token goes higher to say 5x.

1 Like

right, you want to be really conservative in allocations to anything not major, because that’s going to remove incentive to support the stuff that needs it. Small stuff is nice but it’s not like PORT/SHARK/BOLT is going to overtake ZWAP from a utility or health of the ecosystem perspective, for example.

IE: the stuff that supports the ecosystem are the major parts, not the little stuff. The little stuff can grow but should be treated as such.

1 Like

Was there supposed to be AP’s discussion this week? Imo, points seem easier for a noob than 3:2:1 ratio. Also seems pretty quiet here given the importance of this next stuff, what gives?

1 Like