Should we add more pools right now?

Terra proposal is interesting, i think it could be a good addition. I wonder if there should be some clarity on retroactive rewards before adding new pools though. Terra pool is certainly riskier than the current pools, so there would be no incentive for anyone to provide liquidity there (if its split by $ value over all pools), or it could be in large demand (if say rewards were split equally between all pools). If a Terra pool was added now, any liquidity would basically be speculation on which one of those options you end up choosing (as it was for ARC).

In a more general sense as well, should we be adding more pools? Is it even in shell’s best interest to increase TVL right now? (prior to any official LM program and/or V2 release). Keen to hear what everyone else thinks about this

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The team is clearly stating that we need to consider adding more pools so I guess it’s on the menu!
As a Shell newbie I don’t know yet what should be added but I guess more stablecoins for now. PAX & TUSD being the biggest stablecoins not already available on Shell

Would it be possible to add it but in a sort of guarded mode? I consider the risk profiles Terra and ARC to be different. Terra’s stable coin has the advantage of being live much longer but theres an obvious risk of it being cross-chain.

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Yeah its certainly an option to add more, but i think community input on whether it is a good idea is worthwhile. How would new pools benefit shell protocol? Are they likely to bring in new users/liquidity/exposure to shell?

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Although TVL isn’t the main focus right now, I think that growing TVL never hurts. But beyond that, I think there are some important benefits to launching new pools:

  • build relationships with other protocols
  • deepen Shell’s track record as a viable option for liquidity
  • help the core team operationalize new pool creation

For what it’s worth, I think this is an important discussion for the community to have. I also see the benefit to clarity regarding the implications for potential retroactive rewards. It seems to me there are three viable options right now:

  1. Treat all pools equally
  2. Only consider “safe” pools as eligible
  3. Leave retroactive rewards ambiguous

I think anything more nuanced may be too complicated at this point. The key question is how much clarity do we need to start going forward with new pools? In my mind, we should work towards clarity but we shouldn’t let that be a bottleneck to progress.

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Makes sense, as a response to each of the options for potential retroactive rewards:

  1. this would cause massive fomo into any new pools as rewards would be much higher than in the core pools and wouldn’t give any indication if this was new liquidity or just LP’s shifting.

  2. if only safe (read: core) pools are eligible, there would be no incentive for LPs unless provided by the protocol with the main token in the new pool

  3. this could be better than either of the first two options.

Another option would be to say that 80% (or other %) of rewards would be split between core pools and 20% between new pools, this might be a nice balance between incentivizing new pools without it becoming the core focus. To me, anyone can create new pools, what separates Shell is that the pools have the potential to be the most efficient, in which case focusing the liquidity on the high trade volume pools is best.

Even if you didn’t want to specify %'s you could still weight them by perceived benefit to the protocol

To me all pools should be incentivised to attract more liquidity and it doesn’t matter if the exact rewards are not known yet. All a LP needs to know is if its pool is eligible, it will be profitable no matter what.

Another thing to consider for the liquidity mining question is that new pools containing assets or mechanisms from other protocols can potentially be targets for liquidity mining by these other protocols.

Yeah this would be a good thing to mention in any pool proposals

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It seems like clarifying this issue is not a pre-requisite to launching new pools, although doing so is important and would help LPs make more optimal decisions.

Given that, I think we should start a new topic if we want to continue actively discussing retroactive rewards, either generally or specifically to the new pools.

Also, independently of allocating weights to pools, I think it’s worth asking how beneficial a given pool would be to the Shell protocol.

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Think my biggest question on adding new pools is what KPI’s or success factors should we use to evaluate if the current 2 pools are working?

Some ideas:

  • Total daily turnover - daily $volume/tvl in the pool
  • Gas cost of a trade pool
  • Number of aggregators pointing at the pools
  • Slippage if trading x% or x$ of the pool size

Adding more assets is great, but the last few days the USDT/USDC/sUSD/DAI pool has been roughly between $100k and $6mm. Will adding a new pool(s) shed light on improving the current pools? Or will it simply be a marketing distraction to improving the core effectiveness of the existing pools?

The USDT/USDC/sUSD/DAI market alone is enormous. Beating the competitors there would be the best marketing possible and bring in lots of pool fees/aum most likely and make it quite easy to launch lots of new pools I’d think.

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My 2 cents.

  • Total daily turnover should have higher weightage, even at 50% as this is the biggest determination of how active a pool is.
  • Pool size that are way too small should be cut out from consideration, this criteria need not be hard coded into smart contract but can just be not in the final list when the team judges.

As someone that is considering to put decent amount into the pool, I think it’s better to create success in the first two pool, but I could be wrong as Curve started with plentiful. Just that I feel more comfortable to see pool numbers grow as the team becomes more successful.

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Although I agree with the criteria presented, I think there is another benefit to creating new pools that has been overlooked. It is important for Shell to build relationships with other protocols. Indeed, if we aspire to be the internet monetary system, we will ultimately touch any and every DeFi project.

Creating new pools helps build these relationships. Behind the scenes, the Shell core team will engage with and build a rapport with the teams launching the new assets. Publicly, it will be an opportunity for our community to interact with other communities.

Even if the pool per se is a flop in terms of volume and TVL, it could still be worthwhile gaining the experience. Ultimately, we will need to become not only builders but diplomats.

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I don’t disagree, and frankly Kenny and your team is in a better position to determine this.

My 2 cents is the new pools, small it can be, should prevent / mitigate ILs and ask for small yield from new projects. There are many smallish pools that have suffered IL problems, fact even big pools do. Secondly if there is incentivation from the new project even at a single digit yield it will give Shell a reason to explain to those that are against new pools.

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