This is a follow up proposal to “[Reward system update, PNG pairs and massive whales]” to give more detail and specifics to the proposal, as a move to immediately increase the rewards of the PNG pools to start improving the health of the ecosystem. As of now, many large whales are simply farming and dumping from very safe pools. There is nothing wrong with this and they are critical to the health of the ecosystem, but it also does not make sense for the rewards to be completely equal for PNG pairs where risk is much greater.
Virtually every AMM/DEX that has been launched bootstrapped liquidity for their native token by offering much greater rewards for pools that included the native token, which incentivized people to farm that using that token at greater risk for greater reward, and also broadened governance participation. One prime example was SushiSwap, along with many others like 1inch, Pancakeswap, Bancor, etc.
Below is the proposed weighting adjustments to the pools:
AVAX/PNG pool rewards: 3x
All other PNG pool rewards: 2x
All other pools: 1x
As of now, PNG pools make up a very small % of the farming pools. Even with these new rates implemented, whales farming safer pools will still make about 80% or more of the rewards they are currently making, but smaller players will also be incentivized to participate in PNG pools for greater rewards at greater levels of risk and volatility. This will also attract new users to the protocol as it will offer options that provide greater APY yields, which at the moment are quite low compared to other yield farming opportunities returning several times more rewards.
it goes against the Lite paper and it’s bad optics to change a basic rule
the dex seems to be working just fine as it is. If stakers were dissatisfied with risk/reward they would leave the PNG/AVAX pair but that hasn’t happened at all.
it will shift liquidity from AVAX pairs to PNG pairs which is the opposite of what is needed. There is plenty of liquidity in PNG pairs because they have low volume. It’s the major AVAX pairs that need more liquidity.
Swap volume is the way the dex creates value, and your proposal will decrease swap volume instead of increasing it.
This is an urgent request and finds no response by the devs. I think the devs of Pangolin left the project, there is seriously no one who is active on this Forum. PNG price dropped massively and does not follow up with AVAX any more. I am an AVAX Hodler and PNG just made me lose many of my AVAX. I had 644 AVAX now I have 430. Any person who invests in PNG liquidities is a stupid person (including me). That is why PNG liquidity providers MUST BE REWARDED MORE PNG. This is just plain and simple.
I’m sorry for those that bought PNG at a high price. But that doesn’t mean the Pangolin dex owes them. Just as that the dex can’t claim the money back from those that sold PNG at those high prices. It’s all in the risk of trading crypto. You can win big and you can lose big.
The best way to grow the dex and to increase value for PNG holders is to get more swap volume. Not to divert PNG from high volume pairs to low volume pairs.
I think a lot of people have the misconception that increased rewards for PNG pools and liquidity/swap volume in other pools are at conflict with each other. These are not mutually exclusive initiatives, on the contrary there is a level of synergy between these two. Increasing the rewards will drive up the price of PNG, which will in turn also increase yields for other pools that don’t include PNG, thus driving more people to use Pangolin and pool. Depending on your risk appetite you can either pool into a safe pool or a riskier PNG pool, both with valid rewards. This has shown to be effective for many prominent AMMs/DEXes.
Reading some of these posts by people trying to change the tokenomics reminds me of people who try to put out a fire by throwing petrol on it.
It’s pretty simple: if you increase PNG rewards for any pool, you increase the supply of PNG in the spot-trade market which necessarily results in lower, not higher prices for PNG. Instead of a whale selling 100,000PNG per day, they can sell 200K or even 300K per day. Congratulations!
Yes, they need to buy PNG to add liquidity to the pool but that is only a short term price bump after which the selling pressure continues worse than before.
I’ll keep saying this, but the main way to increase value is to increase overall market liquidity for PNG which means more external exchanges and more on-off ramps with fiat. We also need access to traditional hedges for downside risk such as derivatives and lending market (for short sellers). Any other tricks you try will be gamed and leave us in the same or worse position.
We do not need to increase PNG rewards, all we need to do is distribute them fairly. PNG pools are inherently riskier than other pools, so their pool rate should be higher. Tokenomics will not change, we will be minting the same amount of PNG every day, but riskier pools will get a bigger share of the rewards.
However, I do agree with you on liquidity. Ultimately we need mechanisms that will attract constant capital inflows.
To attract liquidity we need to offer more than other AMM. What is better on pangoling w.r.t. other AMM? I see no real advantage if I have to be honest.
It’s copied code, copied UI, low liquidity, same fees, high transaction fees. What’s the point?
Care to point us to an AMM that is doing it right? I don’t see one that has got it all right and everyone is making mistakes along the way, including Uni, Compound and the rest.
If anyone actually had all the answers, Pangolin wouldn’t even exist. But it does and we have some of the best underlying tech supporting the DEX. Now we just need to get creative on where we take this.
There have been some excellent suggestions on this forum but unless the community pulls together and realises it needs to pay to build its market (just like Visa, Mastercard and all the other payment gateways have to do), we will remain a hobbyist exchange.
We also need to find our niche and play to our strengths. I think Avalanche gives Pangolin a significant edge and as Avalanche expands, so does the reach of Pangolin.
No one knows how ETH 2.0 is going to play out. I don’t think it will be smooth sailing for the Ethereum Foundation so this story is far from over…
There is not an AMM doing right. Each one has its own pro and cons, but if I have to be honest I don’t see any pro in Pangolin w.r.t. the others.
If pangolin wants to compete it has to offer something new or something better.
We need ideas, developers, marketing…but that is a completely different topic. Here we are discussing about the PNG distribution which can be better. It won’t be the solution to all problems of pangolin, but at least lets start fixing stuffs.
I agree PNG pool rewards need to be increased dramatically because PNG price is in constant collapse. The action in the AVAX-PNG pool is always people swapping PNG for AVAX. That PNG is coming from all other pools and they are dumping on the AVAX-PNG pool and taking away the AVAX. This dynamic needs to be balanced out because it is not working out for AVAX-PNG LPs.
Another way to fix this is AVAX-PNG pool to pay rewards in AVAX while all non-PNG pools pay in PNG.
I also disagree that PNG pair needs more rewards. I believe there should be a staking PNG farm rewardind avax or something else or even PNG, something worth keeping the PNG and more use cases for this asset, like pancakeswap pools also, etc. because now apart from selling them what else can you do?
I see the people who lost their money on the png pools trying to blame the avax pools for having the same rewards and forcing price down because whales sell all the PNG? that makes no sense. If whales take advantage is because the project itself allows that. If they would get more rewards in PNG pools than in avax pools, they would still be able to make a lot of profit with it and drag price down.
This constant blaming on uni for ‘maliciously’ selling all PNG airdropped is also something worth laughing. The airdrop gave them just what they needed to get their slice, anyone would do the same. PNG needs help! Lets stop trying to blame everyone else and focus on solutions people. SOLUTIONS!