The below proposal aims to redistribute dApp mining rewards towards LPs who mint and LP uGAS token. This will result in a higher APR for LPs and higher TVL in uGAS products.
So far, degenerative.finance (controlled by YAM DAO) receives all dApp mining rewards. The proposal means in practice that YAM DAO distributes these rewards out of its treasury to LPs. YAM DAO will not distribute the default 10% of all UMA rewards.
I suggest to distribute all dApp mining rewards to LPs for Jan (retroactively) as well as February and March.
LPs will now get 90% of all UMA rewards vs 50% previously. Deeper Uniswap liquidity shall also result in lower slippage + more trading fees for LPs. To be clear: If this proposal does not attract additional LPs, YAM DAO will just retain the 40% dApp mining rewards.
Giving up the dApp rewards sends the right signal to the market and to LPs. In order to qualify LPs need to mint + LP uGAS & ETH on Uniswap (that is not changing).
Please vote below.
- Current split of UMA rewards: 50% LPs, 40% dApp rewards, 10% YAM treasury
- Split of rewards is supposed to solve for maximum traffic (dApp) to uGAS-minter (LPs)
- No dApps have emerged that target Degen/UMA synths. dApp mining rewards flow to YAM treasury (good) but that doesn’t support growth of TVL (bad)
- Original announcement on developer mining: YAM x UMA: Degenerative Finance. The Yam community is excited to… | by Yam Finance | Yam Finance | Dec, 2020 | Medium
- Having reviewed the popular DeFi UIs, none of them gives any screenspace to synths (see below screenshots)
- dApp mining rewards have not generated any traction whilst TVL growth is limited
Zerion: Sidebar includes pool, save, borrow. No minting. SNX products are mentioned in a footnote on the bottom and limited to trading of existing synths
Zapper: Pooling + Farming are available choices, no synth minting
Asset management platforms: TokenSets + Enzyme.Finance (formerly Melon) allow trading and LPing but not minting
Solution: Redirect dApp rewards to LPs
- Move the full dApp rewards flowing to degenerative.finance to LPs
- Treat LPs “like first-class citizens” to bootstrap growth
- 100% (=40% of all UMA rewards)
- 90% (= 36%)
- 80% (=32%)
- 75% (30%)
- Yes - give LPs extra APR as a gesture of goodwill