TLDR; Delist MuesliSwap Liquidity Pool Tokens from earning $indy, so that liquidity flows to dexes with the most volume in order to maintain price stability and pegs.
Recently, there has been a push across the greater Cardano ecosystem on liquidity. Awareness has risen about the importance of liquidity and how it effects token price. The more liquidity a trading pool has, the more stable a trading pair becomes. The recent temperature check, temperature vote, and on chain vote provided by Indigo Labs has a big emphasis on liquidity. So I think it is time we discuss where our incentivized liquidity pool $indy rewards are going.
As much as we love MuesliSwap here at Indigo, and after 6 months of being WhiteListed to earn $indy for providing liquidity there, it seems the markets have spoken. Having iasset liquidity fragmented like this is doing the Indigo protocol a disservice. The Cardano ecosystem as a whole is not mature enough to handle liquidity fragmented across multiple dexes as such.
So the proposal is simple: Delist MuesliSwap Liquidity Pool Tokens from earning $indy rewards. This proposal in conjunction with the already proposed delisting of LPTs from Indigo and combining $indy rewards with dexes is another attempt to concentrate liquidity on the dexes that receive the most volume, and thus helping to stabilize and maintain better price pegs.
I disagree, the rewards are already proportional to liquidity and we shouldn’t restrict where people choose to deposit their liquidity. Regarding more concentrated liquidity, it’s clear from the data provided that if all liquidity would move to the other DEXes it would not have a meaningful impact on user experience regarding slippage and price stability either.
This proposal isn’t to restrict anyone from providing liquidity at their dex of choice. Absolutely anyone can provide liquidity were ever they please. This is about removing indy rewards from Muesliswap that sees little to no volume on iassets.
You don’t think the 127k TVL provided for iusd on Muesli would help slippage if applied to another dex?
And think about this… the rewards maybe small but they get emitted every 5 days over the next 4 years. They will add up given enough time. Indy rewards should be concentrated at the moment the same as liquidity while the Cardano ecosystem is still young and developing.
Having one dex with all the insentive is wrong, the point is to have a fair distribution between dexes so that we dont have a central point of failure… Please leave the muesliswap liquidity and incentives! and don’t always push negativity because we are an ecosystem not a one exchange ecosystem
Don’t jump on the band wagon, this would cause centralisation between dexe’s one dex with all the liquidity isn’t good.
1.Attracts bad actors
2.One dex with all LQ incentive leads to less choice of exchange people can use!
3.Not everyone likes to use minswap, a lot of us prefer Muesliswap because lower swap fees
4. Encourage competition and innovation
5.Users are trying to attack muesliswap because they are implementing better revenue sharing system that the users from minswap receive.
DrOctaFunk is only interested in helping Minswap gain all the liquidity and rewards he doesn’t consider the users on other dexes! The cardano ecosystem is huge. Muesliswap tokens only have 10 million tokens and they are having a better buyback system to draw more people to Muesliswap platform which is been implemented soon
Thats not true bud. This is not about picking favorites and we all love MuesliSwap. Niels is a well respected dev in the space and a valued member of the DAO. @DrOctaFunk has always had what’s best for the protocol in mind. This is why he had overwhelming support to serve on the PWG.
Those of us that understand the effects of low liquidity in defi see why this proposal makes perfect sense. It’s the market itself that has chosen consolidate iAssets liquidity onto 2 DEXs. There are 4 more DEXs scheduled to launch this year. What do you think would happen to liquidity if we whitelisted all 8 Cardano DEXs.
When Cardano has the the Liquidity and TVL that Ethereum does we could probably whitelist a bunch of dexs without hurting iAsset liquidity but until then we have to do what’s best for the protocol. Fragmenting $Indy incentives is not helping anyone. If users all chose to provide liquidity on MuesliSwap and if MinSwap was the weakest link then this proposal would have been to un-whitelist MinSwap. It’s a free market and the market has spoken.
Disagree with delisting, lower liquidity pools offer a higher risk/reward ratio for LP stakers and creates different yield opportunities for different risk appetites.
It’s also not clear that delisting muesli would actually concentrate liquidity to a point where it actually makes a difference.
Perhaps there is a middle ground to incentivise increased liquidity, or to have a disincentive for low liquidity pools (reward reductions or something), much like how muesli has ramping yield reward for their pool based on TLV in the pool itself.
There are definitely more innovative approaches to explore that don’t turn a back towards muesliswap
Would the community prefer swapping it for Sundaeswap?
V2 looks great imo.
As for Muesliswap, would like to hear it from LPs who provided for Muesliswap.
Muesli is great in functioning as a DEX aggregator. so when people say they use muesli, it might be their dex aggregator function and this doesn’t relate to the LPs.
Minswap has a dynamic farming distribution system that adjust every two weeks. This means that the more TVL a token has and the more volume it has the more incentives it gets. This has worked amazingly well for minswap (just look at DeFiLlama) as they are not using emotions to adjust these things, the market itself decides. Because of this I believe in the data driven approach to incentive distribution.
I don’t feel like zero trading volume and 1.57k TVL should be rewarded with $indy. Even dexes have minimum thresholds and standards they set to be eligible for a farm. MuesliSwap doesn’t even offer farming for this pair. The only rewards for providing ibtc/ada to MuesliSwap is normal trading fees and our $indy.
This is not about picking favorites but utilizing the Data provided. I agree that the markets have spoken and we should concentrate liquidity where it is utilized the most. We can always re-asses if the markets change. Thanks for putting together OctaFunk.