Restructure rewards and fork Bancor/Balancer

I want to keep this short. Do keep in mind that I am an AVAX-PNG liquidity provider.

In essence, from a logical standpoint, I do not see a reason why liquidity provision PNG rewards should be tied alone to the amount of liquidity provided. Anyone can theoretically deposit liquidity into a pool of some random token that isn’t really traded or used and receive rewards.

In my opinion, PNG rewards should be based on the following: 1. TVL of the pool, because liquidity is needed there where the swapping volume is large. 2. Amount of liquidity provided. 3. Time tokens have been vested in the pool.

  1. Should determine the pool’s total PNG rewards, although there should always be a minimal baseline PNG pool reward.

  2. Should distribute it according to liquidity volume with some lowest starting value.

  3. Should over-time increase the amount of PNG reward received.

With 3, even if a pool TVL dies short-term, because of the 1 basic PNG income + 3 vested interest it will be profitable for someone to keep the pool alive. Everything else is decided by LP dynamics.

More importantly, after this is done, my opinion is that Pangolin should definitely focus on upgrading as fast as possible. I think it would be easiest to just fork, if possible, the existing Bancor/Balancer defi protocols. Or possibly anything currently innovative for that matter. Uniswap is realistically using liquidity pool equations which leave much room for improvement. If Pangolin does not keep ahead in the race, others will.

EDIT:

Also furthermore, from above, 3 should be made large enough to penalize large whales if they fake TVL on their own pools and attempt to boost their rewards from 1.

Only if this token is on the list of tokens rewarded by PNG. A random token PGL is not depositable, thus it is not possible to earn rewards on random tokens, only on the already existing ones. Thus I don’t understood what problem you are trying to solve.

Only if this token is on the list of tokens rewarded by PNG. A random token PGL is not depositable, thus it is not possible to earn rewards on random tokens, only on the already existing ones.

Alright, then not a random token but a valid one, but my point still stands. People can be trading almost no USDC-USDT or whatever pool is valid, and people would still get rewards even though the pool isn’t really useful.

Thus I don’t understood what problem you are trying to solve.

Trying to make a system that incentivizes LPing on pools that are receiving the largest TVL?

The valid pools are all pools that make sense and are useful ones, IMHO. You can check the list here. There is no USDT - USDC.

But that is exactly how the system works today, the PNG is distributed proportionally to the amount of liquidity present on the pools.
And on pools that have low TVL and high volume, the 0.03% fee is earned multiple times for each $, so it works as an incentive to provide liquidity to those pools.
And since the PNG is distributed proportionally to liquidity, it doesn’t make much of a difference on which pool you provide, PNG wise. So, the economic incentive is to provide liquidity to pools with the biggest volume/TVL ratio.

Alright then. I will just let this then stand as a potential post to think about.