[Discussion] On-chain Liquidity Incentives


ITT: Suggest an incentivized pool in the same format as CIP#18 - Incentive for Providing On-chain CRV Liquidity and a reason why you think it’s a good pool to incentivize. Like the suggestions you would vote to introduce.


[3CRV, CRV] Uniswap/Sushiswap pool - Directly swap admin fees to CRV instead of needing to withdraw as stablecoin -> swap to ETH -> swap to CRV


I dont think this will have sufficient/useful liquidity and will be as useful as you think.

? The point of incentives is to create sufficient liquidity where it wouldn’t otherwise naturally form. You’re welcome to suggest a more useful pool

I understand. My question is how much trading volume do you expect 3CRV/CRV pair would have? Once the incentive is over, then what?

The problem is that I think the 3CRV/CRV pair will not have any trading volume thus wasting CRV.

Incentives are never really “over”. The idea is there is a gauge to allocate inflation toward these pools. In the case I suggested, you might see this pool taking some percentage from the 3CRV gauge. So it isn’t wasting CRV, just a redistribution that gives LPs more options depending on what they want exposure to and how much risk they want to take on.

I would like to see a gauge that we can vote on to divert some of the Curve inflation for insurance purposes. The issue with the idle pool that caused it to be unsafe got me thinking about what would have happen had it been exploited and led to a loss of funds for LPs. I think that as a platform it would have been in our best interest to figure out how we would have made LPs whole as otherwise it would erode trust in the eco system. I am not sure where those funds would have come from besides the community funds but I don’t think that the intention was to use them for this purpose.

If we had an insurance gauge then we could potentially use those CRV tokens to cover any platform exploits. Alternatively, we can also use a portion to incentivize individuals that are providing coverage for Curve through some of the insurance platforms (e.g. Nexus Mutual). Insurance for Curve via Nexus Mutual has been constantly unavailable due to the high demand (there is roughly 8.5M USD in active coverage for Curve at the moment) and It might be something that we can incentivize to attract higher coverage. Having our own insurance fund would certainly differentiate us from other DEXs and potentially bring greater capital to the platform due to a higher level of trust.

Edit 12/28/2020: Removing cover as an insurance platform since they were exploited today.

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