Next Steps for Raydium Rewards

[DeanMachine]

Spoke with the folks at Raydium and we have 49 more days of emissions on the Fusion pool

We can decide to do one of the following

-Do nothing. Rewards end in 49 days and thats that
-Extend. We can send more Grape to the fusion pool to extend the time of Rewards
-Stop earlier. We can receive the remaining Grape and cut rewards ahead of time

Let’s use this space to discuss and figure out what our onchain proposal will be!

• Do nothing and let the rewards end in 45 days
• Extend the rewards by sending more Grape to the fusion pool
• Stop the rewards early and receive back up to 3million Grape

[Avidlearner]

I’m torn between doing nothing and extending.

Leaning more towards extending to encourage liquidity provision. But also, the rate of emission should be factored in such that it doesn’t continue to drag down the token price too much.

[legend]

IMO I think we should go for “Do nothing. Rewards end in 49 days and thats that”.

Stopping Raydium rewards will not impact the way users get their membership and voting power as there is still an USDC-GRAPE pool on Orca setup by Orca themselves (might be wrong can’t remember), although there is low liquidity there surely the liquidity from Raydium will be shifting to Orca.

[billy.grape]

I would vote stop, and return the Grape to the DAO.

The pool was intended to last for 12 months, so if we want to continue running this pool we would need to add additional Grape.

As a LP provider who wants to continue holding Grape, it makes sense taking actions which benefit the holders vs the farmers.

• We can use the Grape to bootstrap a new LP pool i.e mSOL-Grape, the new LP pool can have no rewards or rewards in other tokens.
• We can also use the Grape to buy back the GRAPE-USDC and GRAPE-MSOL, using Socean Bonds.

[Whale_s_Friend]

I propose extending!

How about we extend the pool but decrease the incentives?

The more liquid the $GRAPE market is, the better.

Liquidity allows the coin to be converted to USDC without affecting its price. It promotes price stability and decreased volatility. It reduces risk and allows a healthy entrance and exit from the position.

I am fearful we will gradually lose all the liquidity in the pools and $GRAPE will become hard to trade even extremely low volumes. It will not be instant, it will be gradual, as liquidity providers move on trading 10 $GRAPE will cause extreme moves in the price. Without liquidity, we will be heading towards a shitcoin territory that’s full of red flags.

[its.kirk]

I would also vote to End/Stop

• Working with protocols that have aligned incentives is the only way forward and LP pools between protocol will have interesting dynamics between those communities/protocols
• Speculating and giving liquidity to farmers has no utility or benefit for existing members of our DAO

Existing fusion pool atm is too much grape per month to maintain served its purpose then, lets move to new things now

[SgtSavage4]

My vote is to let it run out.

[Jahris]

I’m not the expert on this matter, but it feels like this shouldn’t be a binary decision. Is there a way to extend the Raydium pool with decreased incentives, while also bootstraping new LP pools?

[its.kirk]

Actual Grape holders & DAO members should be rewarded, and not farmers, so it should end immediately (making a new pool is a good idea too, but as is; this is not helping Grape)

[billy.grape]

The purpose of the discussion is to reach consensus on next steps. The rewards will eventually end, and as a DAO we have the options @DeanMachine has shared above.

Is the current LP pool becoming more liquid with the existing rewards?

The overall trend shows a general declining trend in the USDC side and increase in the GRAPE side. To a great extent farming through Tulip has helped make the pool illiquid.

Although Grape is not a Defi protocol, let’s look at what Step Finance has done and perhaps take some lessons on what hasn’t worked for them.

With AMM’s gradually transitioning to more efficient concentrated liquidity pools the need for unproductive liquidity pools will be declining over time. Step finance was not shy to publicly admit that farming was not a good acquisition vehicle for new users on the platform.

They initially stopped the Fushion pool farm early (last year) STEP Updated Emission Schedule. TLDR: -98% less emissions weekly for… | by Step Finance | Medium and then completely sunset
there own AMM’s with a pretty good expiation here → Step Update #8. gm Steppers and its time again for… | by Step Finance | Medium

Mango markets currently has a much smaller LP pool on Raydium with no rewards

Mango also has an active market maker on chain to make sure there is always enough liquidity to make trades on both sides, but is also a much larger protocol with presence on a centralized exchange. If the DAO believes Grape needs am active market maker on chain, this could be a future proposal.

With Grape focusing on reputation and partnerships with other protocols, it would be beneficial to align incentives with other protocols with shared LP pools, and bounties created in these shared pools. This model of cooperation is something which we can push as a DAO. We don’t need to ask for permission to create these pools from the other protocols.

Solana is showing strength in the NFT space, with SOL more actively used as a base currency (by over 16,000 users daily) and Defi protocols losing the lion share of the active user base. It would be beneficial to explore bootstrapping a SOL based, LP pool. As a SPL token, it makes sense our token is natively connected to SOL, ideally we could use mSOL on the one side of the pair so liquidity providers are never losing the staking opprtunities of holding SOL.

[DeanMachine]

Ive added the poll! Lets see how it goes and discuss next onchain steps this Tuesday

[TheRipTyde]

Letting the current LP rewards run their course seems alright.

There seems exceptionally low APY for the pool as is, i’d imagine it may be low risk of large amounts of tokens currently providing LP pool being taken out and sold off once the current rewards end.

I’d imagine adding less Future LP rewards will do very little to entice more LP providers and sink more $Grape.

I’d imagine increasing Future LP rewards would be a costly way to entice more people to provide liquity and sink more $Grape tokens which, in the short term may see an increase in token price as we effectively pay people to hold $Grape. I can’t see how it would lead to greater community/governance involvement and would expect it would follow the same course of see yield chasers entering and leave as increased rewards reduce over time.

[Arximedis]

My 2 GRAPES - I propose we Stop the rewards early and receive back up to 3million Grape

Phase 1 - Stop.
Phase 2 - Evaluate where to allocate and value of maintaining/reducing overall LP liquidity.

TL;DR

1. There has been focus on token price that has confused us on why “price” actually matters. Price should function to allocate governance power, deter gaming/manipulating governance, reduce dilution, and provide an “earning” mechanism for community stakeholders.
2. Incentives for a user to earn/use/hold v.s. purchase/stake/sell the $GRAPE token is a value in v.s. value out issue. The Fusion Pool is over funded.
3. Currently, a new user can acquire equal or greater governance voting weight at a considerable discount to an old/existing member who has held, spent time, involves effort, and contributed value to GRAPE, over time. Plutocracy v.s. Merit.
4. $GRAPE is both a reward and incentive for Governance, Membership, Work, Bounties, Utility/Service Sub-DAO Tokens, Reputation, and DeFi LP Pools. One of these is not like the others.
5. A new user can purchase $GRAPE at a lower cost, stake LP, earn more $GRAPE, and gain more governance power than members who have participated and contributed in the community for a year. All this for a new member without joining the discord, commenting on discourse, making Realms proposals or voting, setting up or using Squads, attending weekly DAO calls, building or testing, providing support/services.

IMHO:

Personally, as I both received and also purchased Grape outright during the launch, converted my purchased Grape & USDC into GRAPE-USDC LP, and continue to provide LP to the GRAPE-USDC Fusion Pool, I have an interest in voting “For” the extension of the pool, but am voting “Against” the idea of keeping the pool active, on or after the 49 day window.

Mechanisms that emit $GRAPE as a reward without a locking mechanism, like a Raydium LP Pool, does not compliment the current/future narrative of Grape, as a DAO. Since governance power, services/utility, and reputation weights are the primary use case for the $GRAPE token, it would be best to minimize the outflow of $GRAPE through any means that does not contribute to the core purpose of the token. Alternatively, lowering the total amount of rewards or liquidity in the pool would be a suitable compromise as a first step, although it’s still an issue. Grape isn’t a DeFi protocol, and liquidity does not need to be so high, imho.

Governance should be relatively equally in it’s “cost” to acquire over time, or at least more stable, by ensuring more organic emissions v.s. outright purchasing v.s. total liquidity.

Example of Grape accumulation Value/Amounts: According to different time-periods and average prices. (A user could acquire more $Grape outright than an older member providing liquidity since 2021.)

ADDING: For context, I believe this question was also framed in June 2022 - GRAPE DAO Reputation Spaces between @Takisoul, @its.kirk, @potrok, & Sebastian (Realms) [who raised an important question that received numerous responses, but may have missed the key example]

“So we are talking about attaching a value to reputation, but I’m curious; How are you thinking about what portion of our (Grape) governance power comparing to the reputation base should you get from the reputation versus the grape token holdings, since you can go and buy $GRAPE?”

“Thoughts? How would you want to combine these two?”

To hear the question (verbatim) - jump to time: 39:51 >>>

DAO Reputation Systems · GrapeSpaces

[TheRipTyde]

Lifinity’s latest medium article on its plans to go delta neutral on its market making are an interesting read

Lifinity v2: Introducing the Delta Neutral Market Maker

Lifinity have touted its concetrated liquidity AMM pools as a service and have several protocols working with them providing their own LP for Lifinity pools.

Would it be worth reaching out to them to see if they could help Grape with a Protocol owned Delta Neutral Liquidity Pool?