Hey Seb_EthMonk & everyone else here,
Great discussion on the extension and likely a good outcome if we extend it. We’re suggesting a slight modification
Our current version of the liquidity rewards has gone a long way in propelling the protocol to top of the leaderboard - putting us on top 3 on DeFi Pulse.
As a community, our next goal should be to eliminate ‘fickle liquidity’ and find those that are committed to the development of the protocol and long term health. To this end, we’re keen to suggest a:
Shift from Liquidity Mining to Options Liquidity Mining
This is not a new idea. Andre has outlined the idea in detail here. This idea is simple:
Instead of getting $INST tokens directly as a reward, you get options instead to buy it at a lower-than-market price. This practice is common in our predecessor - web2. This way, we avoid the problem of people getting “something for nothing” that results in token dumping and we value the token holders and the governance premium that comes with it. In addition, token options also generates fees for the protocol since the liquidity provider has to pay to buy their $INST tokens.
To quote from the above article:
By switching to Options Liquidity Mining instead of traditional Liquidity Mining it means;
- Decreased liquidity locusts
- Decrease selling pressure
- Natural price floor (twap - discount % over epoch)
- Additional fee revenue for DAO/token holders
Look forward to hearing the views of the community. Thank you all!
On behalf of Superpumped,