Pool Rotation (Menu of the Week) [Week 41]

Summary
Discussion to decide on which pools to retain from current Menu, and which new pools should be included in the next.

Abstract
As specified by Boring last week, optimizing how we divide our rewards to incentivize new liquidity pairs forming and stimulate trade volume, is hugely important. There’s been a number of suggestions for how we can pick each weeks’ pools, the prevailing model going something like:

Community’s Fav - The pool(s) most people wish to retain from previous week.

Best performers -The top 1-2 pools measured by trade volume.

Chef’s Choice - A pool chosen by Maki, which can be used in partnership negotiations and the like.

As for the last 6 pools, they’d be proposed by core team for community discussion/to get the ball rolling. After community has been sounded out for ideas and objections, a proposal can be put up for voting.

Specification

The current top performing pairs in the menu are

  • CREAM-ETH
  • wNXM-ETH

with yUSD-ETH & CRO-ETH both close behind

6 pools I randomly picked to get the ball rolling…

  • wANATHA-ETH (High volume on Uniswap)
  • POLS-ETH (Who doesn’t love Polkadot!?)
  • BID-ETH (Bidao seems interesting, okay volume on Uni)
  • STAKE-ETH (Decent TVL/volume ratio)
  • YFL-ETH (Yearn fork with okay volume)
  • TOMOE-ETH (Tomochain has decent volume)

A vote for means you support the proposed model, and the suggested pools (pending eventual changes come by community discourse in this forum thread).

A vote against means you disagree with parts or the whole, and wish to continue discussing the topic.

Poll

  • Yes, sounds great, let’s do it!
  • No, not sure, meh, whatever.

0 voters

1 Like

You can do twitter campaign and let projects get voted in bringing in new users.

3 Likes

TOMOE-ETH is big because of luaswap, where you get high rewards for staking via uniswap. Otherwise the list seems fine. Maybe we should do something like have 10 pools on the weekly menu. The 5 best performers stay, and the 5 worst get replaced. That gives clarity, and people can have an idea if their favorite pool keep getting incentives, og is getting replaced. And gives a little bit of competition between the pools.
Also it involves the broader community more, if we for instance use twitter or similar to get input on the 5 new pools.

1 Like

Another issue, is how to evaluate the top performers. The most important metric have to be volume, but i do think other metrics like TVL and number of trades have some value as well.
Value locked help with slippage, and helps us get free PR from different defi tracking sites etc.
Number of trades shows us how many people interact with our platform, which also have some value.
So maybe something like volume counts for 70% Value locked for 20 % and number of trades for 10%. I don’t know if my % are way off, or if its gets to complicated to figure out the best performing pools using this metrics, and if volume, or maybe volume+TVL is better in practice.

2 Likes

I have championed for a long time that we need an incentivized tBTC-ETH pool. The role tBTC will play in DeFi can not be overstated, it is the first time the largest cryptocurrency in this space(!!!) can move to ethereum in a decentralized way. Decentralization comes first for bitcoin holders and tBTC will be the largest btc peg on ethereum.in time. Why hold IOUs issued by central companies when you can do it trustlessly? This is revolutionary tech, connecting the two largest blockchains in a way never possible before, making sushi a place for liquidity before it builds up on other dexes is trivial. I have talked to many KEEP/tBTC devs and mods and they all would be happy to provide liquidity in return for sushi.

This is so much more important than the next fruit coin guys, its a long term play that could pay off huge.

1 Like

Number of trades isn’t as important though, due to the number of arbitrage bots skewing the stats. If we wanted to use that variable, we’d also need to see % of unique addresses and if there are any addresses behind a large amount of transactions. I think, as you say, volume is the most important, but that TVL is also important.

I agree that we should look into tBTC. Best performing pool on Uniswap is the WBTC-TBTC pool, so perhaps we should emulate that.

Aave are also migrating LEND to AAVE, so we should consider adding AAVE-ETH to the menu and capture some of the early liquidity.

Shall we replace the TOMOE-ETH pair with WBTC-TBTC, and YFL-ETH with AAVE-ETH?

3 Likes

Maybe, the thing is Curve is already adding tBTC to their BTC pools, so might be hard to beat them on the liquidity they have dedicated for btc swaps anyway. Might make more sense to add a tBTC-ETH , tBTC-stablecoin pool and try to build liquidity for trading purposes. From what I’ve gauged from the KEEP community they are more keen on an ETH pair.

A few thoughts…

yUSD-ETH has actually edged ahead of wNXM on 7d volume.

I think both are great. NXM is certainly a project I think has long-term staying power. I’d vote for carrying both pools over to the new menu along with CREAM-ETH to let things play out and collect more data.

YFL-ETH volume has been on the decline on Uniswap past week.

POLS-ETH as well, to a lesser degree…I think it’s fine and a good project in general…but I’d keep an eye on the volume.

wANATHA…getting crazy volume right now but not sure what’s driving it and if it has staying power. So would keep an eye on that to make sure it stays active.

More general thought…

I think at this stage throwing a bunch of stuff at the wall and seeing what sticks is good…but I think we should gradually be moving toward concentrating rewards in the highest potential/most promising pools.

One way to do this…each weekly menu could have one fewer choice than the last until it’s down to 3-5 items. So first week 10 items, second week 9 items etc. Would also force us to be really selective.

2 Likes

I would stick with the top performing pairs mentioned

wNXM-ETH
CREAM-ETH

8 pools I would pick are :

STAKE-ETH (decent pair like ctrl mentioned)
MKR-ETH (Serious project with not many incentive for LP so we could easily capture it)
LRC-ETH (Decent project)
GHST-ETH (Very active community with no incentives at the moment + NFT!)
SLP-ETH (Small Little Potion from Axie they have literally no “love” from any farming projects we could easily capture 100% of the market and cater to new users)
RPL-ETH (Strong community no incentives + ETH 2.0!)
tBTC-wBTC (So we are the place of choice before they get swooped in by curve potentially)
OMG-ETH (No farm and serious top 50 project)

I would also do a sidenote

LEND-ETH should stop being incentivized completely in the regular menu and moved to the new AAVE-ETH pair

Same for YAMv2 -> YAMv3

5 Likes

Great list.

yyDAI pool has actually edged ahead of wNXM on 7d volume and has outperformed wNXM last couple days by a wide margin.

I’m a big fan of Nexus Mutual in the long run, so I’d vote for keeping both on the menu, let it play out more and collect more data.

A few more I’d consider:

MTA-ETH (metastable) on Uniswap past week 5.3million volume with 4.4m liquidity. LRC by comparison got 3.9m volume on 5.1m liquidity. The higher the volume to liquidity ratio, the better.

BAT-ETH. One of the big DeFi coins. Has a ton of volume in general. A bit less on AMMs but no real liquid pool yet so worth a shot.

BNT-ETH. no liquid pool on Uniswap. Had one a couple months back with decent volume. Could be worth a shot.

I am a bit conflicted by MTA since they already have a mining program on BAL it doesn’t make sense to look at uniswap for fair comparison.

BAT could be for the next rotation it seems like a good candidate

BNT should be more liquid on Bancor so I don’t think we need to peak at uniswap like MTA.

yUSD is a good pool in my opinion maybe we can keep it in the list not against it.

1 Like

Yah I think keeping yUSD would be good.

MTA has lots of liquidity on Balancer but more volume on Uniswap. It’s liquidity/volume profile on Uniswap is similar to LRC but a bit more favorable. I don’t have a strong opinion on this one though.

I think maybe the biggest thing we can do to drive volume in the short-term is maintain and grow SushiSwap’s strong position with YFI. It’s an absolute volume monster these days… may write a quick proposal about this.

1 Like