PIP02 - Creating more revenue for Pangolin

Author

@hariseldon2

Summary

Currently the only revenue that Pangolin earns is via the Swap Fees. This is unsustainable considering the amount of competition in this space. With new market entrants appearing at such a rapid rate, our need to innovate becomes increasingly important.

It’s for this reason that we need to investigate other revenue streams which will bring more revenue to our community members.

Abstract

If adopted this proposal seeks to:

  • Create a Pangolin validator on Avalanche
  • Use a percentage of the AVAX locked up in Liquidity pools to stake on Avalanche
  • Use the revenues from staking to purchase PNG
  • Create a marketing campaign to encourage Pangolin users to stake their AVAX on the Pangolin validator
  • Use the staking rewards to become a Liquidity Provider

Motivation

Create more financial rewards for the Pangolin exchange

Currently with all the DEX’s appearing, its a race to the bottom to determine who will ultimately be the most successful DEX. Currently we have the advantage of very low gas fees, however that’s being offset by the high cost of the bridge.

We need to create alternative revenue streams to future proof the long term success of the project.

Specification

Create a Pangolin Validator on Avalanche

The current amount of AVAX needed to become a validator is 2000 AVAX.

If we look at the current Liquidity pools with AVAX as one half of the pair, we could create a rule that allows:

  • 51 percent to be held within the Liquidity contract. This is to ensure that there is always enough liquidity should a major sell off occur
  • 10% set aside for insurance in case any of our contracts are hacked.
  • 39% of the AVAX is then staked on the Pangolin validator. All the staked amounts are always only staked for 2 weeks. This is to ensure that should a major sell off occur, we have a small enough window to get the funds back into circulation.

Usage of Staking funds

The staking funds that are then received from Avalanche staking are then used to purchase PNG. This will remove the PNG from the circulating supply and hopefully create an upward pressure on the price of PNG.

A portion of those fee’s should be used to create a marketing campaign to encourage all Avalanche hodlers to become delegators on the Pangolin Validator. We could also potentially offer PNG rewards if community members delegate to the Pangolin validator.

All PNG held in the Treasury can then be used to fund further development and expansion of the Pangolin ecosystem.

6 Likes

I hope this proposal changes to PIP02 - reinvest pangolin treasury to grow the community by helping projects and promote the ecosystem

The bulk of pangolin is in the hands of a few whales that keep damaging Pangolin and the ecosystem. The only thing you do with this proposal is just increase their wallets even more.

Move your strategy to reward community projects, remove rewards from YFI/SUSHI/UNI and similar tokens and focus on give back to the AVAX ecosystem, after you do that, then go ahead with this proposal as you will be rewarding your community and ecosystem instead of a few wallets.

1 Like

I’d love to help the ecosystem. So let’s talk practicalities.

I definitely agree the PNG rewards should be tailored towards our native community projects.

But how else can we help the ecosystem. I’m thinking of implementing Pangolin Academy where we provide mentorship and learning paths for people that want to get involved in Avalanche and build on our platform.

I’d be keen to hear how else we can support the community?

1 Like

Another thought I had was a dual incentive similar to Beefy’s Boost pools.

So for example, if Yield Yak or any other autocompounder had a pair of say YAK-SNOB, then Pangolin could provide a boost for that pair.

Then everyone could add a boost. So something like this:

  • Yak rewards
  • SNOB rewards
  • PNG rewards

So then if you provided liquidity in that pool, you’d get rewarded with 3 different tokens.

Just an idea, but could be pretty cool.

1 Like

There is successful examples of how to promote the ecosystem thru the main dex rewards. It is better to start with known successful methods:

  • Pancake
    Projects can add pools and the most successful projects on BSC gets farms added with Cake rewards.

  • Raydium
    Projects gets double rewards provided by the project and Raydium

  • Quickswap
    They have a ton of farms available with every project launching getting some love from quickswap.

All these actions and small gestures encourage developers and project leads to move there, to try to build where they feel they are more rewarded and get the needed help to achieve their goals.

No project will be willing to build on a “desert” defi ecosystem if they are not encouraged to do so by the main actors on the space, the foundation and the leading Dex.

Get out of AVAX, look what the big gainers are doing, follow best practices and go one step further to be more competitive. It is difficult to get into Avax as an user, give the developers reasons to build here, help them to attract users from your established and big treasury position, they will pay you off on TVL, volume and token price way more than your efforts to push price artificially by creating a validator and sending money out of defi.

1 Like

Looking forward to meeting and discussing in the next few days. However one thing I’ll say, we can either follow our competitors or we can lead.

2 Likes

One thing we could also think about is AVAX staking + minting stkAVAX tokens that can be freely traded, where I suppose you always get more stkAVAX as you hold since interest from staking, or keep it constant and make stkAVAX increase in value perpetually.