YAM FAM Longer-term LP Incentives - RFF

This is being posted as a request for feedback before formal submission as a proposal

YAM FAM Improved LP Incentives

Objective

Incentivize YAM liquidity providers over a longer time period while avoiding overpaying for liquidity—and creating unnecessary downward pressure on the YAM price—in the first few weeks after launch.

Summary

YAM payments to incentivize liquidity providers in the YAM:yUSD Uniswap pool will be distributed according to the following schedule:

  • 92,538.3 YAM to be paid to liquidity providers in the first week;
  • The amount of the incentive to decrease by 10% in each subsequent week.

If this payment continues indefinitely, the total incentive paid to YAM:yUSD liquidity providers overall will be 925,383 YAM. This is the same LP incentive total as proposed in the YIP-15 amendment.

Rationale

YAM is a long-term experiment, and YAM incentives should be designed to support the goals of the YAM platform over the long term.

The liquidity provider incentives proposed in the YIP-15 amendment start far too high, distributing 30% of the LP incentive pool—almost 10% of the current YAM supply—in only the first week. This dilutes current YAM holders, overpays for liquidity, and puts unnecessary downward pressure on the YAM price.

By stretching the liquidity provider incentives over a longer period of time, liquidity can be incentivized over a longer time period and unnecessary downward pressure on the YAM price can be avoided.

3 Likes

Good Idea! Yes for me

1 Like

I think this makes a lot of sense, though I’m concerned it might limit LP participation in the beginning, which we definitely want for treasury purchases. I do agree we’re overpaying now, though.

I support this proposal.

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Makes sense, I will be voting Yes to this!

1 Like

Love it. Making the LP incentives longer-term will help the project succeed without overpaying. If these incentives aren’t sufficient, we can re-evaluate and consider increasing them later.

2 Likes

I love this as well!

I’m all for a flatter + longer incentive period. Healthier for YAM’s long term growth.

1 Like