Inquiry for $SEA Liquidity Mining Strategies

My intention with this thread here is to help surface valuable ideas so that we will not have otherwise missed them. As our liquidity mining program nears development, we’re trying to inspect many approaches in order to learn and design the most optimal strategy for the Shell DAO and $SEA.

So, if anyone is impressed by a mechanism they’ve seen employed in the space, please promote it here in this thread so that we can discuss pros and cons and ultimately consider if it is apt for our liquidity mining strategy.

Thank you in advance!

2 Likes

Lately it seems strategies that lock token rewards for a longer term have been relatively successful

  • Sushi - get 1/3 upfront, wait 6 months for the remaining 2/3
  • Bao.finance - get 5% upfront, 1 year cliff for the balance that vests over 3 years
  • Bancor - Gives a multiplier depending on time staked. Once withdraw then it resets the multiplier

It seems like by making liquidity providers more attached to the system long term provides for better results imo

3 Likes

Good thread idea! here are a few thoughts

Vesting: This can be good and bad, sushi has done really well with the lowered rewards but is going to have a hard time 6months after they initiated this as inflation will now be the same as prior. I believe this starts in a month or two and should cause quite a bit of price depression. Vesting is basically just delaying inflation to a later date and might be just a band aid for price.

Disincentivizing claiming rewards: You could have so claiming rewards causes reset of a boost multiplier so LP’s which are in it for the long term have higher rewards than those who are claiming and dumping (something like 2 weeks to reach max boost and max reward boost of 1.5-2x normal sounds good here). Youd need to decide how this works with adding more funds, wouldnt want someone to add $1 for 2 weeks, then add 1m when they reach max boost.

Deposit/Withdrawal fee: Other projects have used this and the fee goes to either governance token holders (adds value), or current depositors (causes sticky liquidity). If a deposit/withdrawl fee was linked with being the only way to claim rewards it could work really nicely to get LPs who actually value the SEA token longer term. Apy’s would likely be much higher than other competitors as a result of this

1 Like

Honestly, I think Curve tokenomics are very good. Allow everyone to claim them as they earn them but incentivize locking/staking them to increase rewards. Some mechanism similar to this is what I think would work best.

I would be hesitant to have any forced locking or vesting mechanism as ultimately this would be counter productive in encouraging LPs to switch from curve where there is no forced reward locking or vesting.

Like it or not, curve is by far the market leader in stable/pegged token swaps and any rewards decision should be made with competing with Curve in mind.

2 Likes

Sushi’s token has been trending down quite a bit, possibly due to the 6 months lock now unlocking.

Good idea. I think the Bao vesting and release schedule makes a lot of sense in terms of keeping the community financially incentivized / engaged for years but limits the opportunity for a massive dump and price depression in the short term. Since it is such a long vesting/release period, Bao has offered really high APYs which I would have to assume has brought participation or at least turned heads :call_me_hand:

My vote for the best liquidity mining model out there goes to Curve too. As you said giving freedom to people is paramount, flexibility is efficiency.

Multipliers are attractive because of that, people are free to leave or stay for higher rewards.

Here is a good thread on tokenomics at launch, the team might have seen it: https://twitter.com/Rewkang/status/1366486243064770560