Greetings Algofam,
We are pleased to announce our initial thoughts for GP13 TDR. This is very similar to GP12 with the main difference being the weights used for different pairs. We would love to hear your feedback and craft something that is excitable for our users.
UPDATED ALLOCATIONS**
To read more about our thoughts you can also view our medium article here: Pact TDR GP13 — Initial Thoughts. Hello Algofam! | by Pact.fi | Aug, 2024 | Medium
I would reallocate TDR from the following pools:
goUSD/xUSD
USDC/goUSD
mALGO/USDC
SILVER$/xUSD
GOLD$/xUSD
FINITE/ALGO
to the following lending pools:
$fALGO/$fWBTC
$fALGO/$fWETH
$fALGO/$fAVAX
$fALGO/$fLINK
$fUSDC/$fEURS
The rationale is:
I will continue to voice my opinion that it is a poor use of funds to use TDR for LPs besides certain core assets (eg stables, gold/silver, wrapped assets like BTC, ETH, Avax, etc). This particular gripe is not Pact specific. The problem is that unless AF either acts to stop this or empowers us to vote on this issue specifically, each platform will continue to offer these rewards.
With that out of the way, I think it is a poor use of funds to heavily incentivize pools between wrapped assets of the same type (eg goBTC/wBTC, goETH/wETH).
Nobody is bemoaning their inability to swap goBTC for wBTC. Instead they want the ability to trade Algo and/or USDC for these assets without huge slippage.
These allocations not only fail to meet user needs, but it also stymies trade volume. Deeper pools between things like wBTC and Algo, ETH, USDC, etc would boost trade volume through arbitrage as users try to buy or sell these assets so it meets market price.
Edit: Also, what is the rationale for Pact so heavily rewarding fAlgo and similar Folks tokens? If FF wants to incentivize those with its TDR, that makes some sense, but why is Pact doing this? It is also strange to me that there are fALGO pairings being incentivized without a corresponding regular ALGO pairing receiving similar treatment (eg fALGO/fgoBTC, but no ALGO/goBTC)
I agree with governor, we’ve become flexible with cross-chain assets over the years but it’s starting to feel like overkill.
I’ll also add that I have little confidence that these pools are being utilized by enough unique wallets and/or with a decent enough spread. Essentially enriching a number of wallets that aren’t meaningful—simply for giving us the time of day.
At the very least, the list of pools should be condensed and the amount requested should be more frugal with respect to the recent transparency report. But, TDR feedback has been mostly white noise with little action in the past from respective platforms.
I’d also like to know if these platforms are able to vote for themselves in any capacity through governance, and if this is being enforced in anyway.
It’s not unlikely they have a heavy voting weight with disregard for community sentiment in some aspects, as we’ve witnessed with one of the largest grant receivers in xGov Periods 1 to 4.
A separate argument perhaps, but I feel any holdings exceeding the average community member by 20 fold and affiliated with platforms that are consistently injected with funds should not be eligible for voting and carefully tracked. Otherwise Algorand becomes the platforms’ chain, and not the community’s chain.
This goes not just for PACT but across the board for all Defi rewards.
Hey Ghost,
Thanks as always for your feedback. This will address the other questions/concerns laid out from other users, as well as give some assurance of some upcoming changes thanks to your guys input.
Consolidating on more core assets I agree. I want to be conscious of the diverse LPs we hold, while also getting the best utilization of TDR. We place a focus on lending pools because of their ability to drive additional APR from the lending side, aswell as bolster our Partner Folks in the process. Some LPs are too small in general, and we choose to only build the lending pool liquidity as we are already getting funds from Folks, and we believe incentivizing these alongside will bring in enough liquid to make them more viable.
The goBTC/wBTC and like pools, which see low utilization but high TVL, we have largely cut rewards going here (current APRs are around 1%). We want to continue some incentives here as if we take them away entirely, we are worried about TVL migration due to contract risk and are not convinced a majority of the LP would move to something like algo/BTC with the IL risk and other assets being needed. With the current allocations being small, we find it appropriate.
What are your thoughts on lending pools? We will plan to have updates out later this week to our allocations.
Side note: In regards to voting power… I cant comment for other protocols, nor do I think wallets should be excluded but our team + project have no funds in governance/xgovs and thus do not vote for ourselves. I truthfully do not know the whales who have shown us favor in the past, although I do greatly appreciate it.
To me, this speaks to the need for focusing rewards on these core pairs. If rewards weren’t given out to so many random coins, we could focus more on making rewards enticing for core pairs. Again, this is an issue that needs solving holistically though since no platform wants to do this on their own and cede TVL to another platform that continues to incentivize all these random coins.
