⚡️ PROPOSAL: Should we launch a liquidity mining program on Uniswap with ETH/FLASH? #XIOfeedback

The Blockzero Labs community knows the importance and benefits of liquidity. Within the first year, the XLP (XIO Liquidity Program) became Uniswap’s most diversified liquidity pool and reached over $3M in total ETH/XIO.

Today we are proposing to launch a liquidity mining program for $FLASH called the FLP (FLASH Liquidity Program). Here is how it would work.

  1. Anyone could add FLASH + ETH to the Uniswap liquidity pool.
  2. Daily snapshots would be taken of holders to see what portion of the pool they own
  3. At the end of the month, users would earn $FLASH relative to their pool ownership percentage.

Example:

We put 100,000 $FLASH into the FLP (Flash Liquidity Program) that be earned over three months (33,333 FLASH per month). You add ETH/FLASH to Uniswap and own 20% of the pool.

Daily snapshots are taken of all LPs and you end up with an average ownership of 15% of the pool.

On our monthly distributions through the claims dapp (https://xio.app), you would be able to withdraw 5,000 $FLASH (33,333 * 15%)


Bonus reading material to see the good and bad of liquidity: The Delusion of Liquidity. You’ve heard the cries in every altcoin… | by Tellor Core | Tellor | Medium


What do you think of this proposal? Pros and cons? What would you change? How would you adjust the proposal to increase the success and sustainability of the Flash protocol?

25 Likes

Yes, we need some kind of incentive for flash liqudity on uniswap, but the %rewards and incentives shouldn’t be too high, because the inflation is still somewhat high for flash, due to the flashstaking dapps. A 10% monthly reward like the xio XLP is too high for flash. Maybe a total of 2% monthly could be good.

Beisdes, if the flash pool gets enough volume by itself, liqudity will come on its own from users wanting to get fees, so I am not sure that an incentive program is needed at all

3 Likes

Definitely. We need an incentive for people to add liquidity if we want the project to grow. I would be very wary about the numbers to prevent inflation, so I would limit it to a % of the total circulating supply each month (e.g. 1-10% of the total circulating supply, and this could be different for each month).

2 Likes

Yes, this is the most logical way to increase liquidity and to promote the brand.

Controlling inflation is always a tightrope, but the potential rewards are greater than the risks of not doing so.

I wanted to bring up an alternative idea, that someone made a separate thread for and that’s using the balancer pool instead of uniswap pool with XIO/Flash/WETH. (It doens’t have be 33% for each we could have different ratio)
I’ll start with the disadvantages:
1)Balancer is not Uniswap and it would be a slight barrier to entry for newbies.
2)Balancer fees are high now, but they plan to make an incentive to pay back gas fees to people depositing in the next few weeks (this is just a proposal now, it has not been accepted yet)

BUT there are huge advantages:

  1. We wouldn’t need to put extra money to incentivize people to crate liquidity for flash as we could combine it with our current XLP program (we would have to make sure people keep their multipliers). We could then use this saved money for marketing or development.
  2. Because there will be three assets not just 2 there would be lower impermanent loss.
  3. Anyone providing liquidity on balancer gets bal as reward. So our LP providers would get three different sources of rewards (fees, XIO payout, BAL payout)
6 Likes

I see this as a way to improve liquidity on uniswap which is awesome… however the repurcussions on the dapp might be great…how about we create a way to let people want to add liquidity to both the uniswap and the dapp like a specific program for each or the same program for each.

2 Likes

Would be good if you could also get other coins to incentivise their pools too. Maybe ask stani to incentives aave pool and any other influencial people to load up pools.

1 Like

I’ve been calling for such a program since early January.

I think we should backdate the rewards to 1 Jan to reward those who added liquidity to help flash without doing so for a reward, rather than only rewarding those who do this once they benefit themselves. Also the earlier liquidity providers likely suffered more IL.

4 Likes

We need more liquidity for sure. But one of the major concerns outsiders have about $FLASH is its dynamic supply. So incentivizing is not without risks.

There might be another system though: fees on providing liquidity to the Flashdapp are pretty juicy. Imbalanced compared to uniswap LPs. Would it be possible to lower the % received by the dapp LP providers and use the difference to fund the uniswap LP bonus?

Advantages: limited inflation, better balance between Uni LPs and the Flashdapp LPs

Disadvantages: technically more complicated, dapp LPs would get less fees (considering how juicy they are now though, there might be room for adjustments)

Hi Team, my opinion is to make things simpler and clearer, create the same strategy as in XIO LP, for Flash Dapp and Uniswap.

What about the elastic reward for those who participate in LP: for example if this month or tight 50k Flash to be distributed only 50k Flash, next month if or tight only 25k Flash to be distributed only 25k Flash, with this model no one will be disappointed.

1 Like

I support your suggestion, sounds reasonable. @Ivan

+1

  1. I definitely like this proposal and many members of the community have been calling for this since launch day. Thanks for bringing this proposal to us.

  2. Pros:

  • Will help with the UFO model. A project would only want to participate in the UFO to raise funds if they can go on and sell their flash for capital.
  • Bigger buyers are attracted to liquid coins. The more liquidity we have, the more wallet holders we will have and the liquidity will just keep growing (positive feedback loop).

Cons:

  • Those waiting with idle flash to dump may take extra liquidity as opportunity to dump (benefit of this however is the coins will end up in the hands of people who actually want to use the protocol)
  • Liquidity competition between Flash on uniswap and Flash on the dapp.
  1. I would change the duration of the proposal to 6months.

  2. I believe 100,000 Flash for 3 months is too much Flash for that timeframe and also the timeframe is too short to stimulate enough activity to sustain continued support for the pool after the rewards have ended. I would suggest 100,000 Flash for 6 months (16,666 Flash / month).

I would suggest marketing the FLP along with the XLP and reminding people that both these rewards can be combined into one on the Flash dapp (provide Flash-XIO liquidity) to earn extra liquidity fees.

3 Likes

This is a very good idea and it will be good for the community as a whole.

1 Like

How about keeping the standard 0.3% uniswap. But instead make flash/Eth an additional multiplyer on the claims app. So for each token Flash and future tokens any LP providers earn an additional multiplier as the reward.

1 Like

Uniswap liquidity is low for sure.

What about lowering the Flashdapp LPs fees to get a steady source of funding for Uniswap LPs? It would limit $FLASH inflation & bring better balance between Uni LPs & Flashdapp LPs. I might not be enough to fund the bonus completely, but still

I agree with the proposal 100,000 Flasj for 6 months.

Welcome to the community bud!

2 Likes