GP14 DeFi Rewards (TDR) Proposal — Tinyman

Governance Rewards Proposals
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Proposal for the Allocation of 1,250,000 ALGO to Incentivize Liquidity Pools and Liquid Staking on Tinyman

Objective:

The goal of this proposal is to increase liquidity and trading volume while also drive ALGO staking via Tinyman’s Liquid Staking solution and to enhance liquidity in tALGO pools. We aim to reward both liquidity providers and stakers while contributing to the security and decentralization of the Algorand network.

Proposed Allocation:

We propose allocating the 1,250,000 ALGO reward fund as follows:

  • 60% for the most active ALGO liquidity pools (with the highest TVL and trading volume).
  • 40% to incentivize tALGO liquidity (including tALGO-USDC, tALGO-TINY, and other emerging tALGO pools), as well as to support liquid staking and further adoption.

Why This Matters:

Tinyman is at a pivotal moment. We’ve launched Liquid Staking with tALGO, allowing users to stake ALGO while maintaining liquidity. This innovation enables users to earn staking rewards (currently 4%) without being locked into staking, giving them the flexibility to participate in DeFi while still securing the Algorand network.

  • 11.5 million ALGO is already staked in our Liquid Staking pool.
  • More than 25,000 ALGO has been distributed as rewards to stakers to date.
  • We’ve seen strong interest, but there’s still considerable potential to further drive adoption.

By incentivizing staking and liquidity, we aim to boost both ALGO staking and the growth of tALGO liquidity pools, creating a sustainable ecosystem for Algorand.

Metrics for Success:

To ensure the success of this initiative, we will track the following key performance indicators:

  • Total Value Locked (TVL): Increase in the TVL of tALGO pools and ALGO liquidity pools on Tinyman.
  • Trading Volume: Growth in trading volume across incentivized liquidity pools, demonstrating increased activity.
  • Staking Participation: Percentage increase in ALGO staked through the Liquid Staking solution, contributing to network security and decentralization.

By setting clear metrics, we aim to align expectations with the Algorand Foundation and community while effectively measuring the program’s impact.

How We Plan to Use the 1,250,000 ALGO:

We propose the following distribution:

1. ALGO Liquidity Pools (60% - 750,000 ALGO):

These funds will incentivize the most active ALGO liquidity pools on Tinyman. These pools, which have generated over $125 million in trading volume in the last 30 days, play a key role in Tinyman’s ecosystem.

  • Objective: Boost liquidity, encourage further trading activity, and foster growth on the Tinyman DEX.

2. Liquid Staking (tALGO - 40% - 500,000 ALGO):

500,000 ALGO will be dedicated to incentivizing tALGO liquidity pools, including tALGO-USDC, tALGO-TINY, and tALGO-xALGO, as well as to support ALGO staking through the Liquid Staking solution.

  • Objective: Increase tALGO usage and ensure users have the flexibility to stake ALGO and contribute to the network’s security while maintaining liquidity through tALGO.

Why Incentivize Staking?

Incentivizing staking offers dual benefits:

  • Network Security & Decentralization: Staking ALGO contributes to securing the Algorand network, making it more resilient and decentralized.
  • Liquidity & Flexibility: Using tALGO, users can stake ALGO and still access liquidity. Stakers receive tALGO, which can be used in tALGO liquidity pools or restaked for additional rewards.

Currently, Tinyman is already offering a 4% staking reward to users who stake ALGO in our pool until the official staking rewards from the Algorand Foundation go live. This ensures users don’t miss out on staking rewards while waiting for official implementations.

Incentivizing tALGO Pools:

In addition to staking incentives, we will use part of the allocated ALGO to increase liquidity in the tALGO liquidity pools, including tALGO-USDC, tALGO-TINY and tALGO-xALGO. These pools have already generated $2.5 million in trading volume in the past 30 days and continue to show growth potential. More liquidity in these pools will:

  • Increase the demand for tALGO.
  • Make tALGO a more attractive asset for stakers and liquidity providers.
  • Further contribute to the growth of the DeFi ecosystem on Algorand.

Simplified Reward Structure for New tALGO Pools:

To support the growth of emerging tALGO pools, we propose a simplified rewards structure based on TVL milestones:

  • 5,000 USD TVL: 1,500 ALGO
  • 10,000 USD TVL: 3,000 ALGO
  • 20,000 USD TVL: 5,000 ALGO

This approach ensures that rewards are distributed to pools contributing genuine liquidity while remaining easy to understand and implement. By focusing on key milestones, we aim to attract new participants and push healthy growth.

Long-Term Benefits to Algorand:

This proposal aligns closely with Algorand’s broader goals:

  • Increasing Network Decentralization: By encouraging staking, we enhance the network’s resilience and security.
  • Expanding the DeFi Ecosystem: Incentivizing liquidity and staking will drive more activity and innovation within Algorand’s DeFi space.
  • Enhancing ALGO and tALGO Adoption: By making staking and liquidity provision more accessible and rewarding, we foster greater adoption of ALGO and tALGO across the ecosystem.

These efforts will not only support Tinyman’s growth but also strengthen Algorand as a whole, positioning it as a leading platform for decentralized finance.

Next Steps:

  1. Approval and Allocation of 750,000 ALGO:
  • If approved, 750,000 ALGO will be distributed to qualifying ALGO liquidity pools as outlined below.
  1. ALGO Allocation Breakdown:
  • 400,000 ALGO will incentivize tALGO pools (tALGO-USDC, tALGO-TINY, tALGO-xALGO as well as new qualifying tALGO pools)
  • 100,000 ALGO will be reserved for staking rewards.
  1. Reward Distribution Timeline:
  • Rewards will be distributed from January 14th to March 31st, 2024.
  1. Fixed Allocation for New Pools Based on TVL Milestones:
  • Rewards will be distributed to pools reaching milestones, as detailed above.
  1. Monitoring and Adjustments:
  • We will monitor the development of new tALGO pools closely until February 28th. If there is insufficient traction to utilize the full 100,000 ALGO reward allocation, the unspent rewards will be reallocated to high-performing tALGO pools instead. Similarly, for the rewards allocated to the Tinyman Stakepool, if the Algorand Foundation launches its staking rewards program, the Tinyman Stakepool will no longer receive TDR incentives. Instead, the allocated ALGO rewards will be redirected to high-performing tALGO pools, ensuring efficient and impactful use of the rewards.

Summary of Allocation:

Category Amount (ALGO) Percentage
Liquidity Pools 750,000 60%
Liquid Staking 500,000 40%

ALGO Liquidity Pools:

Asset 1 Asset 2 Reward Allocation
goBTC Algorand 25,000.00
goETH Algorand 5,000.00
goETH goBTC 5,000.00
Wrapped BTC Algorand 5,000.00
ChainLink Token Algorand 5,000.00
Wrapped AVAX Algorand 5,000.00
Wrapped Ether Algorand 5,000.00
Wrapped SOL Algorand 5,000.00
Wrapped BNB Algorand 5,000.00
CAT Algorand 2,000.00
monko Algorand 25,000.00
Pepe Algorand 10,000.00
Dugly Algorand 7,000.00
Meep Algorand 5,000.00
AKITA INU Algorand 5,000.00
Orange Algorand 5,000.00
MoonJuiceRocketFuel Algorand 5,000.00
Coop Coin Algorand 5,000.00
Mewcali Algorand 2,000.00
Marcus Algorand 2,000.00
TINA Algorand 2,000.00
FLOKI Algorand 2,000.00
Folks V2 USDC Folks V2 Algo 50,000.00
Folks V2 Governance Algo Folks V2 Algo 2,000.00
USDC Algorand 450,000.00
Opulous Algorand 10,000.00
Governance Algo Algorand 10,000.00
xUSD Algorand 10,000.00
TINY Algorand 20,000.00
GORA Algorand 10,000.00
mALGO Algorand 10,000.00
Daffi Reward Algorand 5,000.00
Meld Gold (g) Algorand 5,000.00
Meld Silver (g) Algorand 5,000.00
Polkagold Algorand 5,000.00
Defly Token Algorand 2,000.00
Chips Algorand 2,000.00
Vestige Algorand 2,000.00
Infinite Potential Token Algorand 2,000.00
BOBO Algorand 2,000.00
EXA Algorand 2,000.00
ALGO 200 Algorand 2,000.00
Fry Algorand 2,000.00
750,000.00

Breakdown of the Remaining 500,000 ALGO Rewards Allocation:

Active tALGO Pools:

tALGO Pool Reward Allocation
tALGO - TINY 100,000
tALGO - USDC 200,000
300,000

Upcoming tALGO Pools (+5K USD TVL Requirement):

tALGO Pool Reward Allocation
tALGO - xALGO 1,500
tALGO - ORA 1,500
tALGO - Upcoming 97,000
100,000

TINYMAN Stakepool:

TINYMAN Stakepool Reward Allocation
100,000

We are looking forward to hear your feedback!

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Was wondering if you guys would consider In increase the xUSD/ALGO pool. CompX has been hard at work to building a strong and native stable coin for Algorand. Also have been hard at work in supporting many in the ecosystem wherever possible.

CompX has been hard at work building a strong and native stable coin for Algorand. xUSD is a censorship-resistant and permissionless stable coin, designed to be open to all without restrictions or bias. This aligns perfectly with the Algorand network’s move towards a more decentralized state.

As the Algorand ecosystem continues to grow, it’s essential to have a robust native stable coin to match. xUSD has the potential to thrive alongside USDC, supporting the ecosystem’s expansion. Increasing the xUSD/ALGO pool would be a significant step forward in achieving this goal.

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Hi @dashawn.algo, thank you for your feedback! As we approach the launch of the proposal, we’ll carefully review the metrics for each pool. If xUSD shows strong growth, we’ll consider allocating a larger reward accordingly.

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Please drop OUTSYDE GLOBAL BVI CORP (I find anything supporting them distasteful.)

For new tALGO pools, will they be supported from the start of TDR period, and when will they be evaluated for rewards levels? I’m certain I and others in the ORA community can build up an ORA/tALGO LP to meet the top TVL requirements (20k USD) but want to know when the pool would be measured. (I saw the mention of Feb 28th but don’t know how that factors in.)

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Thank you for the detailed post. But you should not support EURS and OUTSYDE GLOBAL BVI CORP.

EURS has stopped minting on Algorand, they’ll leave as soon as they can.
And everybody knows this useless OUTSYDE project owned by a true scammer.

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Hi @Ramrodboy, thank you for your feedback! We’ve reviewed the pools you mentioned and have removed them from being eligible for TDR. Based on TVL and trading volumes, we’ve reallocated those rewards to the DUGLY-ALGO pool.

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Hi @bitshiftmod Thank you for your feedback.

We will establish a tiered farming program to reward new tALGO pools as their TVL grows, encouraging sustainable liquidity growth:

  • Tier 1: Pools with a minimum TVL of $5,000 will receive 1,500 ALGO rewards.
  • Tier 2: Pools with a TVL of $10,000 will receive an additional 3,000 ALGO rewards.
  • Tier 3: Pools with a TVL of $20,000 will receive an additional 5,000 ALGO rewards.

Rewards will be awarded once the respective TVL level is reached and will be cumulative across tiers. Assessments will be conducted at regular intervals to ensure fairness and sustainability.

The tALGO-ORA pool has reached a TVL of more than $5K and is now eligible for the Tier 1 reward of 1,500 ALGO. This pool has already been added to the list, and if its TVL continues to grow, it will become eligible for additional rewards.

Once the 100,000 ALGO rewards have been distributed, no new tALGO pools will be incentivized. If this initiative does not gain sufficient traction, any remaining ALGO rewards will be reallocated to high-performing tALGO pools on February 28th.

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Dugly allocation is bigger than COOP, AKITA, ORA, GOLD$, SILVER$, goETH, wAVAX, wLINK etc… like really? 4 day old rug… not looking good have to say…

Regards,
ROAM

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Hi Roam,

Thank you for your feedback!

TDR rewards are allocated based on TVL and, importantly, trading volume. All the mentioned pools will receive rewards in line with these metrics.

To put things into perspective:

DUGLY-ALGO has generated over $1.34M USD in trading volume over the last 7 days. The pool will receive 7000 ALGO.

Here’s how the trading volumes of the pools you mentioned compare. Each of them will receive 5000 ALGO.

  • COOP-ALGO: $76K
  • ORA-ALGO: $59K
  • GOETH-ALGO: $58K
  • GOLD-ALGO: $57K
  • AKITA-ALGO: $50K

TDR rewards are designed to attract liquidity, and the performance of the DUGLY-ALGO pool clearly indicates a need for deeper liquidity to enable efficient trading.

Thank you for helping us refine our approach!

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TDR is a collective tax and a redistribution of wealth. There is no good reason that the chain as a whole should be paying to incentivize liquidity of coins outside of key trading pairs. Stables and key wrapped assets should be the only focus and anything else is a complete waste of resources for the chain as a whole to be financing.

I am also deeply concerned about DEX platforms like Tinyman being able to use their TDR allocations to favor their own LSTs. This is a centralization concern and it is giving dApps the power to drive out competition using rewards that we are all footing the bill for.

TDR has been and continues to be abused and it should be ended. And I’m very disappointed that we have now regressed from a system of voting on these measures to a system where platforms are once again able to pick and choose allocations without even the legitimacy of a vote (tagging @Adri here on this gripe only once, though I will repeat it elsewhere).

We are now going on two years of a program that was supposed to be both temporary and limited. Yet, it appears to be neither. We keep shoveling money out the door without any real game plan, reevaluation, or reflection. The continuation of this program, particularly in this fashion has me to the point that I am essentially abandoning hope that discussion in these forums can effect positive change or that rank and file voices really matter all that much.

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Hi @GhostOfMcAfee

Thanks for your feedback.

‘‘Stables and key wrapped assets should be the only focus and anything else is a complete waste of resources’’

We are incentivizing pools with actual trading activity that bring value and excitement to the Algorand ecosystem. The goal is not just to provide liquidity but to create an attractive trading environment that can compete with other chains.

Incentivizing only stablecoins and wrapped assets, while important, is insufficient to drive broader adoption or excitement. Users are drawn to platforms where they can trade actively and profitably, and that requires liquidity across a diverse set of pools.

This strategy is aligned with practices observed on dominant chains, where diverse liquidity pools—beyond just stablecoins—have helped build vibrant ecosystems. By incentivizing pools with high trading activity, we showcase Algorand’s speed, low costs, and efficiency, making it appealing to liquidity providers and traders from other chains.

“I am also deeply concerned about DEX platforms like Tinyman being able to use their TDR allocations to favor their own LSTs.”

Incentivizing the Tinyman stake pool and its liquid staking token, tALGO, is vital for driving Algorand’s DeFi growth. Let me clarify:

  1. Boosting Utility: tALGO ensures staked ALGO stays liquid, allowing users to participate in DeFi without losing staking rewards.
  2. Strengthening Liquidity: Incentives for tALGO pools ensure robust trading activity and stability for this core asset.
  3. Ecosystem Growth: Tinyman, as the leading DEX, plays a crucial role in attracting users and liquidity, benefiting the entire Algorand network.

These incentives aren’t about centralization but about creating a stronger, more competitive DeFi ecosystem for all participants.

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But that doesn’t really seem to be the case. You have Exa listed there. It did less than $800 in volume. It’s certainly not seeing a lot of actual trading activity. This is just one example from the list. Meanwhile there are many coins with higher volume than those on this list. So, it’s not like trade activity is what’s driving all these decisions. There is an element of subjectivity going on and the picking of winners and losers.

Hard disagree, and recent experience shows this. People have been trading their butts off with all these new Rug Ninja tokens and not a single one has needed the support of a collective tax and redistribution of wealth to accomplish it. People aren’t trading memecoins because they are enamored with the depth of liquidity and low slippage rates. The volatility is part of it. Where they really really care about depth of liquidity is in stable/wrapped pairings.

Can you provide examples where another chain has diluted holders to give incentives to selected communities? For two years? With pretty much zero results?

The recent trade activity was not the result of two years of endless shoveling of TDR out the door. It was the result of Algo price actually showing signs of life and memecoins being launched on Rug Ninja (trading which, again, happens without any TDR support).

The question is to where they incentived to put liquidity and where the ecosystem actually needs it.

The problem is that regardless of how loudly one professes good intentions, it is dangerous to allow platforms that have LSTs the autonomy to direct how TDR (which, again, is a collective tax on everyone) will be used with regard to their and their competitors LSTs. Basically, we are giving platforms free money to dole out to people to get them to use their LST over a competitor. That is a perversion of free market incentives that risks centralization. And, so as a matter of principle I find it reckless to continue TDR in this fashion.

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Can you add something also to the $vote/tAlgo pool?

At the moment there is $25k $vote/Algo pool, which cannot be moved to $vote/tAlgo because the governance period is not over yet, but we can start incentivizing also this pool (after the dao vote) and I believe the most of the liquidity will migrate there…

Btw to my knowledge the TVL at tinyman of the $vote adds to the total TDR rewards you distribute, so i think it would be fair to give some portion also the the $vote community…

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Everyone wants a boost for their favorite tokens lol. It’s funny.

If anyone really believes Tinyman or other platforms are redistributing wealth, just divide the ASA TDR by the circulating supply of $Algo. Here you go: 100k/8b. If you can’t do the math, I suggest selling your bags ASAP and leave.

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tdr is actualyl 5MM but your point is valid :wink:

I think tinyman is doing a good job with their allocations, even if this means COSG is left out this time. It’s hard to excite volume with all these memes popping up.

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Didn’t you post this exact post on folks finance page too?

If all platforms are incentivizing their own LST - then I think it’s pretty fair.

In fact it’s good to incentivize LST to kick start securing the network - this will help with more decentralization I’d say for the security of the network overall. Why you may ask?

  1. Only a minority of technical inclined humans will be running solo nodes.

  2. Only a minority of humans can afford to delegate 30,000 algos or more to run a node.

Without accommodating everyone else who isn’t technically inclined or who don’t have the minimum staking amount of 30k algos - liquid staking is a very useful thing to further decentralize network security.

If only 1 platform was available for LST - then I would surely be against LST. But this isn’t the case.

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Yes, because the problem is systemic in that Algorand Foundation should have never continued TDR. And if they did, they should have put actual thought into it and set limits on how it can be used in the context of LSTs (among other things).

It is not fair, because each platform gets different amounts, which creates a power protected system. Moreover, it creates a system where the platform is incentivized to cram as much as they can towards their LST. Those who are less greedy get punished. Tinyman, to its credit, did not allocate as much as a percentage toward incentivizing its LST. However, I commented on all of them that this is a problem because it is a problem for everyone in that so long as anyone is allowed to do this it is a problem.

No it is not. The mere fact that people are getting yield from consensus will be incentive enough.

It will not, especially if one platform is allowed to cement itself as the clear leader in this space because they used handouts from our collective treasury in the form of bonus yield to obtain it.

Irrelevent. Not only are there other options but, once again, the yield from consensus is enough and does not require additional sugar stimmies.

You fail to see the problem here. The problem is that unrestrained doling out of TDR can lead to a system where a single platform gains de facto control because their initial advantage cements them. For an example, see LIDO.

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I just excluded the biggest pairs like USDC/Algo, and put it roughly.

Anyway I think COSG deserves to be supported, not for its volume, but for its long-term dedication. It’ll be boosted on Pact afaik, that’s good news.

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Update: Users can benefit by staking their ALGO in the stake pool and receiving tALGO in return. This not only helps secure the Algorand network but also allows users to leverage their assets in a highly capital-efficient way.

With tALGO, users can earn staking rewards while simultaneously utilizing their assets in DeFi activities. For instance, tALGO can be deposited into liquidity pools to generate additional yield. By doing so, users can further benefit from trading fees, TDR rewards, and TINY rewards, maximizing their earnings across multiple streams.

To support this and to deepen the liquidity in the tALGO-USDC pool, we have reallocated a portion of rewards from the ALGO-USDC pool to the tALGO-USDC pool, aligning incentives with ecosystem growth and user benefits.

In addition, we have also re-allocated some rewards based on recent volumes.

Please find the new allocations below:

Category Amount (ALGO) Percentage
Liquidity Pools 500,000 40%
Liquid Staking 750,000 60%

ALGO Liquidity Pools:

Asset 1 Asset 2 Reward Allocation
goBTC Algorand 25,000.00
goETH Algorand 5,000.00
goETH goBTC 5,000.00
Wrapped BTC Algorand 5,000.00
ChainLink Token Algorand 5,000.00
Wrapped AVAX Algorand 5,000.00
Wrapped Ether Algorand 5,000.00
Wrapped SOL Algorand 5,000.00
Wrapped BNB Algorand 5,000.00
CAT Algorand 2,000.00
monko Algorand 30,000.00
Pepe Algorand 10,000.00
Dugly Algorand 10,000.00
Meep Algorand 5,000.00
AKITA INU Algorand 5,000.00
Orange Algorand 5,000.00
MoonJuiceRocketFuel Algorand 5,000.00
Coop Coin Algorand 5,000.00
Mewcali Algorand 2,000.00
Marcus Algorand 2,000.00
TINA Algorand 2,000.00
FLOKI Algorand 2,000.00
Folks V2 USDC Folks V2 Algo 50,000.00
USDC Algorand 200,000.00
Opulous Algorand 10,000.00
xUSD Algorand 14,000.00
TINY Algorand 20,000.00
GORA Algorand 10,000.00
mALGO Algorand 10,000.00
Daffi Reward Algorand 5,000.00
Meld Gold (g) Algorand 5,000.00
Meld Silver (g) Algorand 5,000.00
Polkagold Algorand 5,000.00
Defly Token Algorand 2,000.00
Chips Algorand 2,000.00
Vestige Algorand 2,000.00
Infinite Potential Token Algorand 2,000.00
BOBO Algorand 2,000.00
EXA Algorand 2,000.00
ALGO 200 Algorand 2,000.00
Fry Algorand 2,000.00
500,000.00

Breakdown of the Remaining 750,000 ALGO Rewards Allocation:

Active tALGO Pools:

tALGO Pool Reward Allocation
tALGO - TINY 100,000
tALGO - USDC 450,000
550,000

Upcoming tALGO Pools (+5K USD TVL Requirement):

tALGO Pool Reward Allocation
tALGO - xALGO 1,500
tALGO - ORA 1,500
tALGO - Upcoming 97,000
100,000

TINYMAN Stakepool:

TINYMAN Stakepool Reward Allocation
100,000
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Wait what? If one platform got more algos than another then there must be a reason. Platforms with more users means that platforms is more trusted by users - nothing wrong with this. Therefore it’s fair if they were to get more.

With all due respect, if a new defi platform popped up tomorrow on Algorand offering tripple the rewards of folks and tinyman - I would probably put less than 3% of what i put into folks and tinyman in the new platform that gives tripple the rewards than folks and tiny. You know why? Because folks and tiny have first mover advantage and is time tested compared to the new platform. It’s proven itself. It’s common business sense to use a platform/service/business that has withstood problems over time and are still around and actually works - Trust.

It comes down to trust. No amount of money or incentives can buy trust. Only time can build trust.

Incentives is a good way to support the community who supports the chains long term vision.

Yes more rules and requirements could be set by the foundation to make it perhaps a bit more fair, but all in all I think everything is fair enough.

It’s impossible to make every platform, every community member, every founder - happy.

Can you share the numbers on how many algos each platform got for TDR 14 in total for 3 months?

Thereafter can you share how many algos each platform allocated specifically for their LST tokens for the entire 3 months ?

Yes consensus should be enough, but starting with incentives isn’t a necessarily a bad thing.

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