Lower ATH Staking to increase/expand LP Mining Incentives

As I’ve been considering LP mining for ATH and its long term viability, I always run into an issue when I consider it for myself. I fail to see a financial incentive associated with participating in LP mining compared to simply staking ATH. With ATH staking at its current 50% p.a. rate, from a simple financial perspective, it is better to stake than to provide liquidity at current ATH volumes. However, I do understand the need for liquidity to be provided for ATH on Uniswap and I feel that it is something we do need to help improve. What I’m curious to know is how the community and team would feel about adjusting ATH staking rates lower and offering more LP mining incentives in the future or perhaps on an ongoing basis? This would essentially be a reallocation of rewards from staking to liquidity. I feel like there are potentially more benefits to the project and the community in this shift. Thoughts?

3 Likes

Im shoooting mtself in the foot by saying this, but yes i agree. What should also be done, is lock mechanisms.

Lets say a user wants to stake ATH, they should get a very very small base reward for staling with NO lockup. Lets say this rate is 5% apy give or take

The user can then opt-in to locking up to increase there staking reward.

For every 1 month lock they add to there staling contract, increase the rewards of the staking apy by 0.5% with a maximum increase of 20% (resulting in 25%, 5% base plus 20% lock bonus). This would be a 40 month lock up.

This, to your point, reduces the total ath rewarda by half. Allowing for more to be alloted to LP or other things.

Furthermore, one of two additional complexities could be added.

First (and preffered), if a user has a staking position, but also a LP position of equal or greater value to the staking position, the staking should receieve a small boost. Maybe a additional 2.5% (bringing it up to 27.5%).

This should require a staking time lock aswell. I.e user muat be staking time locked, and have a LP position of equal value, to receieve the LP boost.

The other conplexity would be the inverse. Recieve a LP reward boost if a user has equal or greater value staked, or possibly if the user has a max time lock they could recieve a LP rewars boost.

Regardless, the locked staking funds AND the LP funds need to be useable for voting. The locked staking contracts should expire at the end aswell. Meaning after there staking contract is finished it would revert to either not staking or no bonus.

Dm me me on discord if need be.
@jgb#6822

3 Likes

I like the ideas here. They are in the direction of finding a way to incentivize LP mining. My first read through says what your proposing might be a little complicated, but something like what you proposed sounds good. I think it’d help the community to keep it as simple as possible. Maybe less options than every month up to a 40 month max. 40 options seems like a lot. But I do like the idea that if you have an LP position you can boost your staking. But again, that could also be address via an LP mining incentive for a set period of time. I like that we’re progressing towards a first LP mining incentive separate from this. I feel like it’ll help the team and community get their feet wet. But I do feel like it is time to start thinking, discussing and proposing what comes after that, assuming it passes. It’d be nice to discuss ways to help LP mining be a financially competitive option to simple staking.

2 Likes

I am not super up to date on the discussions going on relative to LP incentives.

Thats being said i basicslly copy pasted a idea from another token, and it seems to do well. Lp mining incentives have to come from somewhere. Where would we take the money from? Descrease single side staking for ath and pur some of it the LP without all my complicated brain work? Im okay with that.

BUT
We should create a lockup mechanism for staking, to help reduce selling off. Liquidity is good, but if users are selling off there rewards, its absorbing tone side of the LP.

Having a locking mechanism would help reduce selling pressure. This should then have a bit of a rewards boost to help compensate

2 Likes

I really like the ideas being discussed here. However, I think we should avoid any form of lock-up period. One of the things I really like about StormX is being able to hold STMX/ATH in your own wallet without any sort of proviso.

If we make providing liquidity more appealing, then the sell offs that occur will likely be absorbed through the liquidity pools.

Can I suggest that we provide a 25% flat-rate reward for providing liquidity each week? I am thinking we could split regular staking and LP rates down the middle, and get rid of the 0.3% Uniswap reward rate. We know that volume between both pairs are fairly light, so the financial incentive with the current Uniswap rate is non-existent for the most part.

In short, 25% staking yield for Athens, and the rest of that (25%) can be acquired by providing liquidity each week. What do you guys think?