Hey everyone,
Please see the TDR allocations for Algomint, we have kept this periods proposal similar to the last with some minor adjustments.
Pact Allocations:
fPools.
fALGO / fgoBTC - 45,403 ALGO
fALGO / fgoETH - 45,000 ALGO
Standard Pools.
goBTC / wBTC - 40,000 ALGO
goETH / wETH - 40,000 ALGO
Tinyman:
fPools.
fgoBTC / fALGO - 18,000 ALGO
fgoETH / fALGO - 18,000 ALGO
Algorai:
goBTC Vault - 8,000 ALGO
goETH Vault - 8,000 ALGO
Feedback welcomed.
Incentivizing pairs of wrapped assets of the same character (eg BTC/BTC, ETH/ETH) is a not just a waste of rewards. The pairing involves little risk and does not substantially help drive liquidity depth where it is needed. People want to trade between algo and/or USDC with these assets without incurring huge slippage. This doesn’t solve that problem at all.
TDR has been and continues to be abused and it should be ended.
Hey @GhostOfMcAfee
Continuing from the discussion on the Meld Gold thread, I agree, but we currently face the issue of the AMM tech being very inefficient for volatile pairs. To the point where LPs (like in this last period) are taking losses even with rewards. Most of the larger LPs we have spoken to weren’t interested in the risk, with the only way to mitigate said risk being to market make the pairs directly to ensure any price mismatches where they are key LPs could be neutralized by arbing themselves. This wasn’t an option for them for many reasons, but there were several factors outside of what it would take (tech-wise) to do so. There was also the issue of not just needing to build the tech but also needing to beat out anyone else competing for the same arb opportunities. In short, a lot of liquidity / TVL would be lost (rather than reallocated), and they are metrics projects like Pact are keen to retain, at least for the moment.
Not to ramble, but much more must be done for TDR to be genuinely effective.
In saying that we will have another review of the numbers, did you have any thoughts on the fPOOLS v Normal Pools?
The thing is that if you are incentivizing the pools of wrapped assets of the same character (BTC/BTC), then you are further disincentivizing people from contributing to the pools where real depth is needed. My gripe here is not exclusive to your projects and much of it is frustration with the Foundation for failing to set objective standards/goals and work towards meeting them (however they have to) instead of just continuing a program like TDR without really evaluating whether it is meeting those goals.
As far as fPools vs Standard Pools, I’ll be honest that I don’t feel qualified to speak on the breakdown. My view its that the best usage (at this time) for wrapped assets like BTC and ETH on Algorand is as a means of allowing futures trading. But, that is only possible if there is also a deep enough bench of liquidity in standard pools to allow liquidation to happen dfficienciently. I have no clue whether the proposed breakdown furthers those objectives, however.
Hey @GhostOfMcAfee
Thanks, mate. Some of the answers in the Meld Gold thread probably helps here with some context as well. I think, according to your last comment, rewards won’t singlehandedly further those objectives. A multi-faceted strategy is needed, and the depth of liquidity necessary to achieve efficient liquidations isn’t feasible with the current version of AMMs.
Also, the stable swaps allow each asset to access the others liquidity. So if you are trading ALGO to either goBTC or wBTC, for example, the stable swap pool means you can leverage the liquidity from either to get a better trade.