SPS Governance Proposal - Reduce SPS:Swap.Hive LP Incentives
(Edited)
DAO Sponsored Proposal #6
This proposal is part of an ongoing effort to rework and adjust our LP incentives to ensure that we're creating value for the SPS DAO and our token. There are pools that some feel are being significantly overpaid for the value that they provide to our community. If a proposal does not pass, nothing will change until if/when a new proposal is made and passed. Please provide feedback during the preproposal phase as it relates to this particular pool's proposal.
If this proposal passes, the SPS DAO will reduce the inflation being paid to the SPS:Swap.Hive liquidity pool on Hive Engine to 1,000,000 SPS per month from the current 1,106,895 SPS per month.
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I do not feel able to come to an opinion based on the info above.
Is this pool used much?
Who gets this 1.3 million sps or where does it go?
I've done several deep dive posts on the topic. This one should help:
https://peakd.com/spsdao/@clayboyn/a-sustainable-approach-to-sps-dao-liquidity-pools
That whoosing sound is most of that post going over my head.
With regard to this specific proposal, is there an executive summary of the impacts, postive and negative?
Right now at 3 cent SPS we're paying about $40,000 a month. If this passes it will go down to about $30,000 a month. If the price of SPS increases that $30,000 increases as well. Basically it's about a 25% cut in inflation to this pool.
well, unless there are any benefits to us as the dao in doing it, i would support this.
Based on your own analysis this is the 2nd best value for money pool for the DAO (SPS per $Vol).
Why should we cut the best value for money pool?
Where will extra inflation go now?
It would just be an inflation cut. It's actually one of the pools that is doing well enough we can start over time phasing out incentives imo... I think we have to start thinking about ways to cut where we can as there's only a finite amount of whitepaper inflation. This pool is one of the best for earning trading fees, so it doesn't need as much incentive. The other pools that are getting no volume are getting no trading fees, but we have to look at bigger picture to determine the value, which is what I did in the bigger posts on this topic I've done. My personal opinion is that the pools getting little to no volume need to drop in size considerably and start being more volatile to drive up volume.
Deliberately underproviding liquidity to drive up arbitrage is an interesting idea I've not come across before. On low fee hive that might work, on fee chains the fee would surely eat the tiny rewards.
Not too sure how this benefits the DAO unless it has LP in loads of small pools? And community would not benefit at all due to worse trading rates.
The SPS token has terrible volume across all our trading platforms. The only one doing any considerable volume (hive-engine) are not tracked. Ultimately I think it would be very beneficial for the DAO to open up a lot of smaller (think $10,000 each) pools bridged to multiple chains with new pairs. We need more volatility and volume to encourage arb trading. Exchanges aren't going to take us seriously without either a fat paycheck to buy their attention or enough volume to appeal to their nature. Exchanges make money on people trading a token... no volatility, no volume, no exchanges.
Thank you for participating in SPS DAO Governance @clayboyn!
You can place or monitor SPS Stake Weighted votes for and against this proposal at the link below:
Link to this Pre-Proposal
Updated At: 2024-03-18 23:38 UTC