Incentives for ARCX/ETH UNI pool

There appears to be an active ARCX/ETH pool on Uniswap but with only about $40,000 in liquidity. I suggest that we provide some incentives for increasing liquidity to that pool.

https://info.uniswap.org/pair/0xdd4d68a13508827f72ece02dfcd0f2e3c28ab8d5

Creating more liquidity for an ARCX/ETH pair will help ARCX in the long run as the 1INCH pool only has an ARCX/1INCH pair. Allowing people to stake their UNI LP on ARCX.money for ARCX incentives would allow more liquidity, less slippage and create greater access to the market for ARCX tokens.

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Would rather see a pool seeded with initial treasury arcx to make it large enough and be sure slippage and initial fees (as LP providers are likely to trade with the pool as they set position to provide LP) end up with treasury.

Would also prefer to see a Balancer smart pool with a more bullish arcx:eth ratio (70/30 or 80/20–as aave did for their governance token). See: 80/20 Balancer Pools - Balancer

How did this UNI pool get started? It has only $44k in assets as of April 17.

Also, the arcx symbol on the UNI app is anon :thinking:–that tends to make me run from an LP and make it easy to confuse with fake pools.

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Agree w/ Balancer as well.

I have no idea where the original UNI ARCX/ETH pool came from or who created it. I just noticed it was active and had a small amount of liquidity in it. I also agree the treasury should provide some liquidity on UNI and offer some rewards to incentivise others to do the same so we can grow that pool.

Setting up the ARCX/ETH UNI pool is defs something we should consider straight after Sapphire is coming to action. My two outstanding qs atm:

  1. Can we get this lined up with Sushi’s ONSEN program?
  2. How much should we deploy from the treasury and with what curve type (80/20, 70/30 etc)?
  3. Is it maybe worth just waiting for UNI v3 and setting up liquidity ranges instead?
  1. Sushi Onsen sounds like an awesome idea. Unfortunately, I have no idea who to reach out to there to get that going. Maybe someone in the community who has contacts w/ Sushiswap can figure out how to get the process rolling?

  2. UNI V3 is tentatively scheduled for 5/3 but it wouldn’t hurt to get something going on V2 since all you’d need to do is provide some liquidity to the existing V2 UNI ARCX/ETH pool. Adding liquidity should be trivial.

I think we can get some help with point #1 and agree with point #3.

Ideally we want to be very conservative with how much of development funds to add to be be LP, do you have any numbers/math on a healthy amount to seed the liquidity pool with?

If there were incentives offered for providing LP on UNI, I believe you wouldn’t have to allocate ANY dev funds to it. People would gladly contribute their ARCX and ETH to that pool in exchange for those rewards.

I think a decent sized pool of about $1M on UNI would provide a nice starting point. If you want to be really conservative, IMO, $500K in the ARCX/ETH pool would create some additional activity. In comparison, the ARCX/1INCH pool has $5.5M Liquidity right now but that pool has been losing a lot of liquidity because the 1INCH rewards ended.

Just noticed this was going on. Nice work with starting this discussion.

Re: #1 Onsen. Don’t know if you noticed, but I think 0xMaki in the discord, which is a good sign he’s been watching the progress of ARCx. This is also assuming this is the real 0xMaki from Sushi. Maybe the team can just DM directly?

One other thing to note:

Since the 1INCH rewards have ended – unless 1INCH is going to provide more incentives for us on the ARCX/1INCH pair, there is no advantage for LP providers to provide their liquidity on 1INCH and take the IL risk of both 1INCH tokens and ARCX tokens. The advantage of the ARCX/ETH pair is that half of the liquidity is in a more stable asset like ETH. Therefore, if given the choice to provide liquidity to ARCX/ETH or ARCX/1INCH – with rewards being the same for both – I think almost everyone would pick ARCX/ETH pair on UNI. We should do this ASAP.

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So this will defs be a priority once the token split happens imo since we want to incentivise liquidity on the new token and encourage people to migrate over. Wonder how we should think about rewards for 1inch vs Uni/Sushi tho given that we still want to support 1inch as a firm partner of ours.

I think the way to look at rewards is to consider the IL risks. The ARCX/1INCH pair exposes LP to both ARCX and 1INCH fluctuations and therefore, should provide much higher APY than an ARCX/ETH pair where the only risk is really just ARCX fluctuations. It made sense that 1INCH provided some of those rewards since half of that liquidity was in 1INCH tokens. But now that they are no longer providing any rewards for that pool, I think the current rewards don’t justify the risk that LPers take.

On a ARCX/ETH UNI pool, the current rewards would make sense since you’re only exposed on ARCX tokens volatility. But the ARCX/1INCH pool should be giving much higher APY than what is there currently – that would be fixed if 1INCH re-started their rewards. Any chance we can talk to them about having them restart the 1INCH rewards (at least some part of it) for the ARCX/1INCH farm?

Would also like a Balancer 80/20 pool …

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Kind of agree here … that said, the ARCx pool is offering the highest APY of all the farms.

Would be nice if 1inch added some rewards … but what’s their incentive?

The incentive would be to grow that pool and create more trading activity? With V3 sapphire launch soon, they might be motivated to capitalize on the marketing blitz we’re about to embark on? Just speculating here.

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We had a chat with the 1inch team this morning and they’re open to considering restarting rewards to help co-market v3 and support us in general. I think we can maybe prioritise some sort of split between the 1inch pool versus Sushi/Uniswap one. There’s also some stuff with v3 where we’ll be integrating the passport directly into the yield farms themselves that can present us some interesting options. I guess the main qs on my mind atm is:

a) Uni/Sushi 50/50 Pool or Balancer 80/20 Pool
b) What is a healthy split between 1inch and uni/sushi/bal expressed as a percentage?

Great discussion quality here btw, keep it up :slight_smile:

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It’s great news to hear that 1INCH is willing to restart their side of the rewards for the ARCX/1INCH farm. That changes things in my mind a bit – especially if they’re going to also help co-market V3.

I like Uni/Sushi 50/50 though there’s a good argument for 80/20 Balancer as well. I like to keep things simple so for me, the perference would be Uni/Sushi.

As for the split of rewards between 1INCH and Uni/Sushi/Bal, I think it should be weighted much more heavily for the ARCX/1INCH farm because of the increased risks/volalitiy of the 1INCH token (it’s tanking hard right now). The IL could be massive on that pair.

For Balancer/Uni/Sushi, since half (or more) of the tokens in those pools will be something more stable like ETH or a stablecoin, the IL shouldn’t be nearly as bad. So the rewards can be lower for those pools. I’ll let smarter people decide exact percentages but that’s my thinking right now. Just my 2 cents.

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Balancer or Sushi Onsen (I believe there’s a 2ETH fee to register for Onsen?) are my preferences. Uni fees and V3 transition makes things messy

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I’m bullish on both $1inch and $ARCx …

Prefer using 1inch over Uni … prefer Sushi over Uni

Balancer gives out their own rewards for providing liquidity in the form of $BAL tokens … pretty sure the team won’t have to incentivize that one so much and will be good to have at least one pool with a stablecoin pair … with low IL.

As for a split … 50/35/15 … 1inch/Sushi(or Uni)/Balancer :man_shrugging: :man_shrugging:

Or 40/40/20 :stuck_out_tongue:

good point on the BAL rewards. I hadn’t even thought about that. But you’re absolutely right – they provide some incentives here and we probably don’t need to do much incentivizing there other than provide some of the initial liquidity on Balancer from the treasury to get that started.

As for UNI vs Sushi, I would also prefer Sushi because of the Onsen rewards. So if we had to just go with 1 of the 2, I would go with Sushi and just not worry about Uni. As long as we have one liquid ARCX/ETH pair somewhere, that’s good enough for me. Having both is fine too but I wouldn’t want to deploy too much of the treasury towards it if we didn’t need to.

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From my perspective I think it’s really important to have multiple venues.

UNI liquidity is a must, it’s the go to AMM for new market participants and we don’t want to isolate ourselves by being too niche regardless of when v3 launches. I don’t think it needs incentivised with ARCX rewards.
Onsen would be great but would totally depend on what liquidity the team would be prepared to put up.
With the option of 1inch on the table I would like to respect that initial support from them and continue the pool (provided they can guarantee incentives).
I’m very keen on a balancer pool provided we could get whitelisted for some BAL rewards, it wouldn’t necessarily need to be seeded. Uni and Sushi definitely would.

My preferences:
40% UNI
30% 1inch
20% Sushi
10% Bal (if necessary)