The axlUSDT-axlUSDC pool currently receives 14.698% of ASTRO incentives, and the ASTRO-LUNA pool receives none. I propose we shift these incentives, such that axlUSDT-axlUSDC has 9.799% and ASTRO-LUNA has 4.9%.
Through discussion on Discord and Astroport Forum, the Astroport community has reached consensus on lowering the incentives for the stablecoin pool. Max has pointed out that the stablecoin pool generates very little fees proportional to incentives, and others have commented that USDT has no utility in the Terra ecosystem.
At the same time, many in the Astroport community are frustrated at the low liquidity in the ASTRO-LUNA pool, which currently has no incentives. Many people buy LUNA on CEXes, send it to Terra, and use it to buy ASTRO. For them, it’s inconvenient to have to swap to USDC to access the greater liquidity in the ASTRO-USDC pool. Plus, when LUNA unlocks begin in November, people will want to go straight from their unlocked LUNA to ASTRO. Deeper liquidity is needed.
The ASTRO-LUNA pool is currently at $225,000 of liquidity. Proposed redistribution of allocation points gives the pool 4,900,000 ASTRO annualized, which, at an ASTRO price of $0.07, is $343,000 in annualized incentives. That would support $686,000 worth of liquidity with a 50% APR from incentives. Plus, there is often significant trading volume in this pool, meaning either the liquidity depth or APR from last sentence would actually be higher.
The axlUSDT-axlUSDC pool currently has $8.2 million in liquidity. Since 1/3 of incentives are being removed (and the APR from fees is negligible), depth would shrink by 1/3.
Appendix 1: The Future of axlUSDT-axlUSDC
This is a bit of an aside, but in the future I think we should take incentives from the stablecoin pool and give them to new tokens that appear on Astroport. For example, in a separate proposal I think 2,050 allocation points should be taken from the stablecoin pool and given to the new TPT (Terra Poker) pool. As new tokens appear, we should keep taking from the stablecoin pool until it has no incentives or the community shows a desire to leave it with a small amount of remaining incentives.
Appendix 2: Allocation Points Tables
Appendix 3: Code to Execute
“pools” : [
Pending the community’s opinion, after the required number of days I will put this up for a vote. In the meantime, please comment.