As you know, Indigo’s CDP Liquid Staking improves capital efficiency and lets a user’s ADA have multiple reward capabilities — rewards earned from Cardano from staking, and rewards earned from iAssets put to use within Indigo or other DeFi protocols.
All ADA deposited into that CDP will continue to earn staking rewards from the stake pool that the wallet is delegated to.
In the meantime, INDY is distributed to Stability Pool providers, iAsset LP stakers and INDY stakers.
Each epoch, an excessive amount of INDY is distributed and bring unnecessary downward pressure on the peice token. In parallel, an excessive amount of ADA is distributed lowering the effect of INDY utility.
Therefore, I would like to propose that the ADA rewards be halved and to dedicate the other half to buy back INDY on the market and allocate them for future INDY rewards instead.
This way, INDY token would become more attractive whilst keeping incentives better to all parties in the protocol but in form of INDY.
I Trust this proposal will bolster some interesting comments.
Thanks for your time reading this topic.
Looking forward from hearing to you
not that it has much weight but I would vote no on this. It’s an artificial fix for something that isn’t really an issue. TBH the price of Indy is more than fair given the TLV.
Ada rewards are the best incentive to stake Indy into governance, if you cut that by half you remove a lot of incentive to participate in that. Since you didn’t specify governance ada rewards I’ll remind you that SP ada rewards are not really rewards, rather compensation for iAssets burned, if you cut those in half it would be stealing from SP providers.
Bluntly, we’re going to need those fees to pay our developers. Start thinking about how this protocol can generate revenue to pay for itself, and less about handouts to token holders.
I see what you mean but I refer to the ADA rewards distributed to the SP to stakers which you are not using to pay developers as it is distributed to the community. The way I see is that incentivizing in ADA will make this ADA more than probably re-invested elsewhere. Buying back INDY to re-fill the pool that distributed INDY rewards would 1) stabilize INDY price and mitigate potential drop of INDY rewards to the market 2) incentivize SP to provide more liquidity and encourage investors to open CDP given that INDY value would be less subject to downward action 3) increase the number of INDY stakers and rewards them even more as the number of INDY to be distributed would be higher.
To make clear, I here refer to ADA fees rewards. Team already has INDY tokens as remuneration plus, here, would be half ADA rewards. Such rewards would increase along with higher TVL as it would increase the number of ADA staked.
And the bought back INDY could be used to keep INDY rewards running forever.
Currently it’s not clear to me how stability pools are going to be incentivized once all INDY has been distributed, I see this as a risk to the protocol as the incentive will drastically diminish.