Proposed Discussion for an xDai Swapr Rewards Pool for HAUS/WETH Pair focused around the novel LPDAO PoolHAUS

The DAOhaus community recently released a novel concept of an LPDAO, a DAO for LPs to better organize, make decisions and earn together. The details are laid out in this post: PoolHAUS and Decentralized Liquidity Provision.

You can also learn more about HAUS token here and what it’s used for.

Currently, the focus of LPDAO is the xDai Swapr HAUS/WETH pair which is the largest HAUS liquidity pool (mainly due to the Showcase Farming Program that took place during the launch of Swapr Farming).

There have been numerous internal and external discussions (also with DAOhaus) over the past couple weeks to smartly develop a plan around this initiative.

Below are some of the important discussion points (benefits and open questions) for why it might make sense to create another rewards pool to keep the HAUS-focused LPDAO attached to Swapr.

Benefits:

  • Currently, Swapr has little attention from outside the DXdao community.

  • Swapr and DXdao already had success and gained more attention from the earlier HAUS/WETH showcase pool. Aim to grow this.

  • DXdao has expanded its community of DXD holders. Aim to continue this.

  • The HAUS/WETH pair is the only 3rd party related pool on Swapr that has decent liquidity. Aim to grow this.

  • So far, it’s the only 3rd party related interesting success story associated with Swapr.

  • This novel LPDAO idea (which has the potential to become more popular) is currently “attached” to Swapr LP. It would be a big loss to lose this liquidity to another DEX.

  • As LPDAOs expand, Swapr can be positioned as the go-to, recommended DEX for LP pools.

  • Opens doors to future opportunities for interesting technical integrations into Swapr - one idea is Swapr LP pools could give fee governance directly to an LPDAO

  • Open opportunity for DXdao to use an LPDAO for DXD or one of its product tokens - this LPDAO could potentially earn HAUS rewards (via proposal to UberHaus DAO)

  • Open opportunity to work closer with the DAOhaus community

  • With Swapr’s main chain currently xDai Chain, this opportunity ties in well because of HAUS’s main presence on xDai

  • Great publicity and good for growing awareness of Swapr

Open questions:

  • So far, Swapr rewards (DXD pairs or HAUS/WETH pair) have not led to massive volume/fees for Swapr

  • It is unknown if incentive rewards are worth the cost (will be easier to experiment once SWPR tokens is live)

  • The HAUS community on xDai chain is relatively niche. In fact, the xDai community is still niche.

  • DXdao doesn’t have a tool yet for two projects to trustlessly co-fund a rewards pool, making it hard to launch a DXD & HAUS multi-rewards pool in tandem.

  • Because of delays with SWPR token, we are put in a position to use other tokens from DXdao’s treasury (DXD & WETH) as rewards for now.

Proposed Rewards Pool details

With LPDAO spurring interest, there will likely be a stronger shot of reaching at least $500k which would boost the pair to be the 3rd highest capital pool on xDai Swapr behind only WETH/DXD and WETH/xDAI.

There will be a more certain idea for total targeted capital as the LPDAO forms over the next week.

As for timing, the LPDAO will focus on an initial time period of 3 months (however this could be changed be the LPDAO).

As it is still uncertain when SWPR token will be available, one idea is to choose a time period of 6 weeks. This would allow rewards to get started but give the opportunity to do a re-evaluation at a given date.

One goal could be to set the rewards to target an APY between 15-20% based on most likely total capital.

There is currently $370k of capital in the HAUS/WETH pair on xDai Swapr.

There is already another $115k of WETH in LPDAO that will be going into the pair, giving a current total of $485k.

Depending on additional interest and WETH and HAUS prices this could end up likely reaching $500k or more.

Rewards of $5.5k in DXD and $5.5k in WETH would be 19% APY with $500k of capital.

It would be 21% APY with $450k of capital and 16% APY with $600k of capital.

The numbers are obviously dependent on WETH and DXD prices as well.

At current prices, this would be token rewards of:

DXD ref $425
Number of DXD 12.94

ETH ref $3,090
Number of ETH 1.78

Summary

This seems like a reasonable cost to DXdao to stay tightly attached to this LPDAO experiment while maintaining and even increasing capital into xDai Swapr.

Ideal date to begin the rewards would be around August 15th as the LPDAO kicks off.

At 6 weeks following the start, DXdao will have the opportunity to evaluate the circumstances and make any needed adjustments.

5 Likes

Updating the proposed numbers based on new information:

  • Arbitrum will plan to go live in August (and SWPR token hopefully as well)
  • Reducing the initial time frame to 4 weeks
  • Adjusting to Target Capital of $610k
  • Adjusting to current market prices
  • Target APY of 18%

Proposing two alternatives to take:

Alternative #1:

WETH and DXD rewards

At current prices, this would be token rewards of:

DXD ref $450
Number of DXD 9.44

ETH ref $3,230
Number of ETH 1.32

Alternative #2:

Given this week’s discussion on the DXdao Community call around DXD buyback, maybe it makes sense to avoid giving out DXD rewards currently.

This campaign could be WETH rewards only:

At current prices, this would be token rewards of:

ETH ref $3,230
Number of ETH 2.63

Also, it would be easier to get WETH into the DXdaoLiquidityMiningRelayer
Alchemy xDai currently doesn’t natively support DXdao’s DXD.

Thoughts on which one to go with?

1 Like

To provide some additional information:

During the community call on Thursday, there was as active discussion around how the DXD buyback is going.

Some points were raised that giving out DXD rewards through incentive programs invalidates the work the buyback program is doing. This concern should be discussed further.

This topic is open for discussion, but if there is any concern that DXD should not currently be used, then it could make sense for WETH only to be used for now.

4 Likes

Most of the DXD given as rewards will probably be sold, so there is merit to the concern which a community member raised. But on the other hand, some small fraction of the recipients may look into the DXD in their wallets a bit before selling, and decide to buy more of it, becoming tokenholders and joining the community. This is especially the case with this pool, which is likely to consist of many DaoHaus members who don’t know much about DXdao. Gaining new community members is invaluable. For this reason, I am in favor of keeping the DXD rewards, and the next buyback could simply be increased by $4,250 to offset this distribution and settle the concerns.

Whether the rewards ends up being ETH only or a combination, I’m in full support of the proposal, which has many benefits as @sky mentioned.

1 Like

This time we could create a dxd/haus pool and give weth and/or swpr.

I agree with this logic. My educated guess is most farmers are not selling the DXD actually, but becoming DXdao stake holders.

Let’s move forward with the dual rewards.

2 Likes

Proposal on xDXdao

Alchemy: Alchemy | DAOstack

DXvote (alpha): dxvote.eth