This post proposes an addition to the Astroport Incentive Framework so that the community can make decisions on incentivizing Astroport pools on other chains besides Terra 2.
- Detail how to approach ASTRO incentives on a brand new deployment (on a new chain)
- Detail how ongoing emissions should be handled on a new chain
The Astroport Incentives Framework is currently lacking any guidelines to incentivize pools on new chains where Astroport might be deployed. Specifically, the Framework should detail the steps to be taken in order to:
- Decide on which and how many pools should be incentivized on the new Astroport deployment
- Decide on the total amount of ASTRO to use to incentivize the new deployment
- Decide on which deployments should receive less emissions so that the overall ASTRO inflation does not increase
- Decide on how to judge and adjust the effectiveness of the incentives on the new Astroport deployment
Choosing Which Pools to Incentivize
We propose that each new Astroport deployment incentivizes between three to eight pools in the first eight weeks post launch. We believe each selected pool should adhere to the following constraints:
- The first pool contains ASTRO paired with either USDC, USDT, (one of) the chain’s native token or ATOM, in this order of preference
- The second pool contains (one of) the chain’s native token paired with USDC, USDT or ATOM
- The third pool should be a stableswap containing USDC and USDT
- Every pool from the fourth to the eigth one should be chosen according to the average daily trading volume it had in the past 30 days
- The minimum average daily trading volume for a pool must be at least $100K in order for it to be considered
- If the pool has been trading (on a DEX or orderbook) for at least 30 days on the chain where Astroport is deployed, governance should take into account the daily trading data from that pool in order to decide whether to incentivize it
- If, instead, the pool does not yet exist on the new chain where Astroport is deployed, governance should take into account the 30 day trading volume from at least one other chain where the pool does trade. For example, tokens A & B might trade on a DEX on Terra but not on Injective. In that case, governance should take into account the trading volume on Terra in order to decide if the same pool should be incentivized on Injective
There may be special cases where it can make sense for the Astral Assembly to incentivize liquidity for a brand new token that is not trading on any other DEX. For example, Astroport might be deployed on a chain that launched just recently. A project there might be closely associated with the main thesis of that particular ecosystem and thus it could make strategic sense for the Astroport community to consider incentivizing that project’s token. Cases like these should be debated thoroughly on the Astroport forum and the team that wishes to have their pool incentivized should make a detailed post explaining their value proposition.
Choosing How Much to Incentivize Each Pool
We propose that the Astral Assembly allocates ASTRO emissions to each pool so that the ratio between the value of expected fees (produced by a pool) and the value of the emissions is ~0.1.
Balancing Emissions Between Astroport Deployments
Governance should seek to allocate incentives in accordance with a target fee:emission ratio (currently 0.1), regardless of what chain a pool is deployed on. If Astroport fee growth reaches a level where this would result in more incentives required than is allowed by the ASTRO emission schedule, the target ratio should be increased so that emissions can be brought back under control
Judging Ongoing Emissions on a New Chain
Ongoing emissions on each Astroport deployment should be managed according to the guidelines from the current version of the Astroport Incentives Framework.
This means that, if and once a vote passes to incentivize Astroport pools on a new deployment, the Astral Assembly should gather every eight weeks to analyze the performance of each pool (be it incentivized or not) in order to decide on emission changes.
Note that it is not mandatory for the initial batch of pools to be dual incentivized. That being said, any future pool requesting ASTRO emissions (on any new Astroport deployment) must dual incentivize their pool(s) before posting a proposal asking for ASTRO.
The community can debate this proposal on the forum for a week, after which the Assembly should post the proposal on-chain and signal whether they support it.
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