APGP 6: Commit 127,000 APW for the Dual Liquidity Mining Program on Bancor 3

[Tenzent]

APGP 6: Commit 127,000 APW for the Dual Liquidity Mining Program on Bancor 3

Summary

This proposal seeks to launch an APW/BNT liquidity mining campaign for the APW liquidity pool on Bancor 3.

Rationale

There has been a discussion to deploy 400,000 APWine to Bancor POL. To further deepen the APWine/Bancor relationship, this proposal seeks to commit 127,000 APWine for Bancor 3’s Dual Liquidity Mining Program in order to maximise the BNT matching rewards of 50,000 BNT, all going to APWine LPs.

Bancor 3’s distinguishable features from other Decentralized Exchanges include:

• Infinite Single-sided staking.

• Instant Impermanent Loss (IL) Protection - Instant protection from the moment you stake. There is a 7 day cooldown period and 0.25% withdrawal fee. At the end of the cooldown period, if an LP chooses to leave the pool, they forfeit the fees and rewards accrued during the cooldown period back to the pool. The withdrawal fee is used by the protocol only to assist with paying out Impermanent Loss Protection.

• LP tokens - bnAPW LP tokens that represent single-sided APW with no IL downside, making them great collateral and very useful for governance or native staking strategies.

• Dual LM rewards - No need for external contracts; the APW rewards auto-compound for all LPs gaslessly and immediately become available liquidity in the pool. The APW rewards can be claimed or staked in a separate rewards contract that accepts bnAPW.

Dual Liquidity Mining Program

The BancorDAO has approved a Dual Liquidity Mining Program with a cut-off date at the end of May whereby:

• Any APW committed to the Bancor 3 LM campaign in the APW pool will be matched 1:1 in dollar value with 50,000 BNT in rewards, all going to APW LPs.

• As mentioned above, the BNT LM rewards will be provided in a separate rewards contract that accepts bnAPW and can be claimed or staked in the BNT pool.

• The BNT rewards will be emitted over 24 months on a flat emission schedule. The APW rewards don’t need to follow the same schedule - the APWine DAO can choose the rate of the APW distribution per block, total amount and model (flat or exponential decay emission models).

Means / Technical Implementations

All that would be required of the team is to add APW liquidity in the pool and stake the bnAPW in the LM rewards contract.

Voting Options

• For - Allocate 127,000 APW to Bancor 3’s dual LM program on the APW pool.

• Against - Do Nothing.

• Abstain

Should we add incentives on top of the APW/BNT pool ?

• Yes, add 127K APW
• No, reduce the incentives amount
• No, don’t add any incentives
• Abstain

[CoolGuy]

@Dydymoon @Tenzent Wheres my vote poll

[CoolGuy]

The problem I have with this proposal is that we already have too much in the way of liquidity for the apw token. With the Tokemak vote & earlier Bancor vote, we could be seeing around:

Uniswap $0.6 million
Sushiswap $1.8 million
Bancor $0.8 million
Toke: $3.3 million

Total: $6.5 million liquidity for a token with a market cap of $8.5 million. That will make value movement very difficult and essentially turn $apw into a bleeding stable coin.

A $220,000 liquidity mining program does not seem necessary for apw at the moment. Maybe once we hit 30 or 50 million I see a need for more liquidity but at our current valuation its a tad unnecessary.

[Enerow.eth]

I’m aligned with @CoolGuy on this one.
I think that we have enough liquidity right now compared to the current market cap.
I don’t see how another liquidity mining program could be beneficial for APWine.

[Dydymoon]

I just added the poll ser

[Dydymoon]

Adding some extra informations about this from the discord

Also added an option on the poll to reduce the amount in case there’s an interest for this as this proposal is for the maximum amount possible iirc

[tfns]

Hey everyone, Tiago from Bancor. Feel free to choose any APW amount for rewards! The proposal suggests 127,000 APW to maximise the BNT Liquidity Mining matching program but any value up to roughly 127,000 APW will get 1:1 matching with BNT rewards going to APW side only.

Part of the rewards and matching BNT would go to the staked APW treasury and help recoup part of the emissions.

The proposal for the dual LM program has already been approved by the BancorDAO with a cut-off date at the end of May.

[Tenzent]

@CoolGuy

A $220,000 liquidity mining program does not seem necessary for apw at the moment. Maybe once we hit 30 or 50 million I see a need for more liquidity but at our current valuation its a tad unnecessary.

I would agree under normal conditions but you have to take two things into consideration:

• The treasury holds half a million dollars of liquidity as of the last vote, that means a great deal of these emission will be recouped in BNT and APW Rewards.
• It’s extremely cost efficient $110,000 of the rewards will be free of any cost to us.

Also yields on APWine will likely drive a price increase since people will have a form of yield and buy in order to stake.

Edit: We can also go for a much smaller campaign if we wish, Bancor can match UP TO 50K - can be less.

[foxsteven]

Just wanted to point out that this proposal actually can REALLY help grow the APW treasury.

The POL on Bancor is already IL protected, now if you provide APW rewards, the treasury can get those and the BNT rewards.

This is 4x more effective that the usual LM.

Usually LM goes to both sides of the AMM - APW and TKN - here its all to TKN
Additionally, you get matched BNT - so thats a 4x

[CoolGuy]

@Tenzent @foxsteven @Dydymoon

@CoolGuy

The problem I have with this proposal is that we already have too much in the way of liquidity for the apw token. With the Tokemak vote & earlier Bancor vote, we could be seeing around:

Having more liquidity than marketcap if this vote were to go through unaltered. In this case the value of the token would take much much more value to move than the current liquidity(+bancor & tokemak votes).

a=maximum amount that can be traded to get to execution price
e=execution price limit
x&y are the number of input and output tokens in the pool(assume aggregator uses all pools equally)

Calculation Without Liquidity Mining

y=1,069 ETH($3,039)
e= 0.00036845ETH/APW($1.12)
x= 3,628,041 APW($0.8958)


a=(y/e)-x
a=(1,069/.00036845)-3,628,041
a=726,697.53(~$650975.65)

Calculation with Liquidity Mining(treating it as if we are adding the same amount of liquidity that is currently in our Sushiswap liquidity mining(1.8 mil))

y=1365 ETH($3,039)
e= 0.00036845ETH/APW($1.12)
x= 4,632,729 APW($0.8958)

a=(y/e)-x
a=(1,365/.00036845)-4,632,729
a=928,020.08(~$831,320.39)

So with our current liquidity(with bancor and tokemak votes going through) it requires $650k to move the price of APW up 25%. If the bancor liquidity mining vote were to go through and it adds up to the same amount of liquidity that Sushiswap liquidity mining gives(1.8 million). Then it would require 831,320 or about ~28% more value to move the price of APW/ETH up 25%.

[CoolGuy]

However, one of the positives I see with this Liquidity Mining is the marketing and exposure that comes along with it. If APW-DAO could get a planned Marketing Strategy with Bancor or some sort of extended partnership than simply liquidity mining; I could see the cost of the liquidity mining as more of a marketing stint rather than a liquidity generation one.

Especially since Bancor is coming out with their Version 3, I see them drumming up a lot of attention which APW could really benefit from as well. How that marketing could be done I am definitely open to ideas.

[foxsteven]

Two things:

1. If you want whales to be able to buy large amounts of APW, you need that liquidity.

2. Bancor’s LP tokens are the perfect type of token for an integration.

But I guess someone from the APWine team would need to comment:

[Dydymoon]

Actually, Tokemak can only redirect up to 1.3M which they did, also it seems there was some withdraw on Sushi and Uni pools, which now bring the current liquidity to :

Sushi APW/ETH : 1.42M including 1.3M redirected from tokemak
Uni: 20k$
Bancor soon 800k$

Which brings us to 2.25M liquidity

[Dydymoon]

It would be amazing to have the same calculations with the actual liquidity if you have time

We also need to keep in mind that this incentive is only up to 127k APW so 5.3k APW/monthly maximum

Also considering that the DAO would own 50% of the liquidity, it would also get back 50% of the rewards I guess

[Tenzent]

@Dydymoon

Also considering that the DAO would own 50% of the liquidity, it would also get back 50% of the rewards I guess

slight correction, the DAO owns all of the liquidity as far as LM is concearned - the BNT side will not earn APWine Rewards it all goes back to native holders/stakers.

[CoolGuy]

The toke redirection has not happened yet.

Sushi with LM: $0.7

Tokemak: $1.9mil(41% of curve apw/tapw)
Uni: $0.006

Bancor: $0.8

Total: $3.406 mil liquidity from $6.5 mil last week.

Our current liquidity is perfect for our size(3.406/8.8) We should only think of increasing it as our market cap increases. I have no idea how much liquidity bancor LM adds. But it’s hard to think it won’t be atleast on par with sushiswap.

[Dydymoon]

You mean that the APWine Dao would actually get back the rewards if no one else deposit, and farm BNT too ?

[Dydymoon]

Ser you’re only looking at the APW part, but the sushi LP is 1.42M

Same for Uni there is 11k if this is a 50/50 pool

As for Tokemak, yes they deployed all their reserves (so 738k APW + equivalent in ETH) in the sushi pool

They can’t deploy more than that for now

[tfns]

It is convenient to have enough liquidity to accommodate for larger swaps and allow APW to have a more natural price discovery. The same way a token can moon if liquidity is low, it can also crash.

However, it should be noted that on Bancor 3, not all of the liquidity in the APW pool needs to be used for trading. In fact, we can increase and decrease the trading liquidity limit to set how much of the liquidity is available for swaps, according to your preference. The remaining liquidity still accrues swap fees, just won’t accrue IL and will be used for our internal strategies coming in the next phases, with flashloans being the first one.

[Dydymoon]

Hey guys ! I just had a call with @Tenzent to get more information about the rewards.
So the rewards in APW are auto compounded (added in single sided liquidity and matched with more BNT by the omni pool) and the Bancor DAO isn’t farming BNT or APW.

This means that if no one deposit in the pool besides the DAO (which we dont want but just to illustrate) then the APWine DAO will get back the APW which will be auto compounded + will farm BNT claimable.

Considering that it only represent around 5k$/month, I’m personally in favor of matching the 50K BNT, but let’s do a quick poll about the amount.

Note: It can be topped up in several times and stopped at any moment.

How much APW should we add to match the BNT rewards over 2 years ?

• 127K APW (50K BNT matched)
• 95.25K APW (37.5K BNT matched)
• 63.5K APW (25K BNT matched)
• 31.75K APW (12.5K BNT matched)