Summary
With Astroport’s imminent launch of PCL pools on Osmosis, the protocol has an opportunity to dramatically increase it’s userbase. To help spur initial adoption, this proposal recommends incentivising LPs of the following pools with $ASTRO emissions for a period of 1 month:
- NTRN/USDC
- INJ/USDC
- LUNA/USDC
- SEI/USDC
- DYDX/USDC
- ASTRO/OSMO
- TIA/OSMO
Abstract
Emissions
These pools were selected for their high volumes on Osmosis, providing a good opportunity for both LPs and Astroport. In addition, TIA/OSMO is likely to be eligible for $OSMO emissions (pending governance approval), granting LPs dual incentives from both Astroport and Osmosis.
In the screenshot below, dailyAstro emissions for each pool was determined to provide a lucrative APR for LPs to help kickstart a sizeable amount of target liquidity.
Astroport contributors have analysed utilisation and fee revenues of these pools on Osmosis to come up with reasonable emissions. The targetTVL of the proposed Astroport pools has been determined by looking at the past 30 days of volumes on Osmosis.
For Astroport pools to do half as much volume as their Osmosis counterparts and have comparable price impact, they would need the aforementioned targetTVL. Given the proposed fee tiers (5 bps to 20 bps), the midRangeFees APR is easily calculated.
While the $ASTRO emissions proposed are quite generous for LPs, they are conservative when compared to fees generated by these pools, except in the case of LUNA and DYDX.
The LUNA pool on Osmosis is small and does very low volumes, thus it gives inaccurate results with our methodology. That’s why it’s our belief that having a liquid and ASTRO incentivised pool on Osmosis is a great opportunity for Astroport and justifies those emissions.
DYDX also has a low TVL pool on Osmosis, and with the high proposed incentives, Astroport has the opportunity to offer the deepest pool for DYDX liquidity anywhere in the Cosmos.
For all other pools, the estimated Fees/Emissions ratio is above 1, following a similar framework to previous emission proposals. In addition, the target ASTRO APR of 10% for these pools is in line with APRs decided on in ARC-115.
Note that this incentives initiative is distinct from the Astroport’s standard incentives framework as it’s specifically designed to encourage adoption on a new outpost. These emissions are proposed for a period of 1 month after the launch on Osmosis and may be revised lower/higher based on performance and expectations.
Implementation
The funds for the incentives will be sent to the Astroport Builder Multisig on Osmosis to manually set up the gauges.
Conclusion
Astroport’s passive LP experience is in contrast to active liquidity management on Osmosis and therefore this launch provides a tremendous opportunity for Astroport’s AMM design to reach a wider audience. The incentives proposed are carefully calibrated to attract both, liquidity and revenue, with a view to increase protocol profits in the long term.
Executable messages
[
{
"wasm": {
"execute": {
"contract_addr": "terra12ncurr62xe93xrsh2drp4zvehj0gn32lfnshr8k0p4xfyju2knwq2qgmh2",
"msg": {
"execute": {
"msgs": [
{
"wasm": {
"execute": {
"contract_addr": "terra1nsuqsk6kh58ulczatwev87ttq2z6r3pusulg9r24mfj2fvtzd4uq3exn26",
"msg": {
"send": {
"contract": "terra1jhfjnm39y3nn9l4520mdn4k5mw23nz0674c4gsvyrcr90z9tqcvst22fce",
"amount": "152289600000",
"msg": {
"channel": "channel-392",
"remote_address": "osmo1yyw80yqf7vytg6l9mtjlj8ru6egd3svvl77zye"
}
}
},
"funds": []
}
}
}
]
}
},
"funds": []
}
}
}
]
Copyright
Copyright and related rights waived via CC0.
