Discuss: Opening new Liquidity Pools & Continue Orbital Campaign

Finance
21

Yes, for now, the majority seems to be in favor of incentivizing the wZNN/wQSR pool.

The next thing we would need to agree on is whether to launch an ETH/wQSR pool, start a pool on Supernova, or do both. Based on the first poll, there appears to be interest in an LP on Supernova as well. However, considering the comments mentioned above, we might want to start with the wQSR pool first and reassess later when there’s more demand for xETH/xUSDT/xZNN on Supernova.

I will start a new poll on Friday to gauge consensus. From there, we can think about the distribution of Orbital emissions, but suggestions are still welcome.

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22

If we directly use ZNN and QSR from the orbital fund to create the pool, (rather than community LP’s) then the only “cost” to the orbital fund would be the impermanent loss between ZNN and QSR.

The liquidity could be pulled and returned to the orbital fund at any time.

23

I still think it’s better to set aside a portion of the emissions for the pool, as it incentivizes users to put their spare QSR to work.

Impermanent loss will also be shared amongst liquidity providers, whereas if we use the reserves for the pool, the IL will hurt future Orbital campaigns, as it will create a discrepancy between ZNN and QSR in the fund.

24

Seems like starting with wZNN/wQSR pool is the way to go, what are next steps?

25

We can set the ratio to whatever we want before supplying the ZNN/QSR. So for example, the pool could be based at 1:5 ZNN:QSR if we think the relative value of qsr will rise, in order to mitigate IL.

We should run some numbers to see what the cost rewarding LPs is, vs the potential IL between ZNN/QSR if it is provided directly from orbital.

26

I believe the 1:10 has always been the standard for this pair.

Why not just keep start with that and keep it simple?

Question remains how much Orbital rewards to give…

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27

Uniswap can route pairs with a common pair like ETH. A wQSR/eth pool is the best option. Uniswap will autoroute znn to qsr swaps. So we can have both znn/eth and znn/qsr swaps.

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28

With a wZNN/wQSR pool, you won’t have to insure the liquidity providers against potentially severe impermanent loss, like you would with an /ETH pool.

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29

I would rather we pair it at market rate which is currently 1:8.

@SugoiBTC should we start a poll to gauge community sentiment on the ratio/distribution of orbital emissions?

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30

I believe that the ZNN/QSR pairing should be matched in terms of USD value, requiring a 50/50 split to contribute to the existing wZNN/wQSR pool.

I should have provided more detail in the initial polls, specifically in the poll titled “How the LPs should be funded.” This was intended to propose launching a new Orbital Campaign on Supernova, utilizing our reserves to effectively kickstart it.

If we only look at incentivising the wQSR pool, I would refrain from using the reserves but allocate emissions to it with the following reasoning:

Factor Using Orbital Emissions Using Orbital Reserves
Sustainability Continuous and long-term, as emissions are ongoing Finite resource, once depleted cannot be replenished
Impact Steady incentives, but emissions would need to be split between multiple pools, reducing per-pool rewards Strong short-term boost, high-impact use
Inclusivity Incentivizes users who don’t have enough QSR to spawn sentinels Does not affect QSR requirements, but may not incentivize smaller participants effectively
Impermanent Loss (IL) Encourages sharing of IL among participants May place more burden of IL on the reserves
Flexibility Tied to the ongoing emission schedule, less adjustable Highly flexible in the short term, provides liquidity when needed
Long-term Resource Preservation Preserves reserves for future use Depletes finite reserves, limiting future flexibility
Participation Barrier Lowers entry barriers, encouraging broader community participation Does not stimulate community participation; fewer incentives for broader involvement

Summary

  • Orbital emissions encourage broader participation by incentivizing users without enough QSR to spawn sentinels and help share IL, making it more inclusive and community-driven.
  • Reserves can be a powerful tool for targeted liquidity boosts but are finite, limiting long-term flexibility and inclusivity.

@SugoiBTC should we start a poll to gauge community sentiment on the ratio/distribution of orbital emissions?

Yes, if there are no further objections we can start looking into the percentage of the Orbital emissions that we can allocate to the wQSR pool.

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31

Does the Orbital address receive ZNN/QSR token emissions?

32

I’m not sure. From what I’m seeing is that the Orbital address only holds the reserves. I think the emissions are baked into the protocol and are being sent through this address, but maybe someone in the community can check the code to verify this.

33

No, same case with AZ address afaik

35

I ran some prompts in ChatGPT and came up with several scenarios to adjust the orbital emissions, aligning the APY of the wQSR pool with the current APR that sentinels provide (11.67%). These scenarios also consider the impact on the ETH/wZNN pool.

Input Data

  • Daily Orbital emissions: 561.6 ZNN + 1250 QSR

  • Current Sentinel APR: 11.67%

  • Current ETH/wZNN Pool APR: 72.4%

Scenarios

Scenario 1: 500k wQSR pooled

  • Orbital Emissions Allocated: 12.79%

  • Resulting APR for wZNN Pool: Decrease to 63.14%

  • Resulting APY for wQSR Pool: 11.67% (target achieved)

Scenario 2: 1m wQSR pooled

  • Orbital Emissions Allocated: 25.58%

  • Resulting APR for wZNN Pool: Decreases to 53.88%

  • Resulting APY for wQSR Pool: 11.67% (target maintained).

Hypothetical Scenario: 12.79% allocation with pool size increasing to 1m wQSR

  • Orbital Emissions Allocated: Maintained at 12.79%

  • Expected APR for wZNN Pool: Remains at 63.14% (no change in percentage allocation).

  • Resulting APY for wQSR Pool: Decreases significantly to approximately 5.84%

Impact on ETH/wZNN Pool

  • Original APY with 100% Emissions: 72.4%

  • New APY After 12.79% Reallocation (to match Sentinel APR at 500k wQSR pooled): Approx. 63.14%, reflecting a modest decrease but maintaining substantial rewards.

  • New APY After 25.58% Reallocation (to match Sentinel APR at 1m wQSR pooled): Further reduced to approx. 53.88%, demonstrating a significant impact.

wQSR Pool Analysis

  • 500,000 QSR Pool: Allocating 12.79% of the total emissions achieves the target APY of 11.67%.
  • 1,000,000 QSR Pool: To maintain the same APY for a larger pool, 25.58% of the total emissions is necessary.

Supporting Tables

Main Scenarios

Scenario Pool Size (wQSR) Orbital Emissions Allocated Resulting APR for wZNN Pool Resulting APY for wQSR Pool
1 500,000 12.79% 63.14% 11.67%
2 1,000,000 25.58% 53.88% 11.67%

Hypothetical Scenario

Scenario Pool Size (wQSR) Orbital Emissions Allocated Resulting APR for wZNN Pool Resulting APY for wQSR Pool
Hypothetical 1,000,000 12.79% 63.14% ~5.84%

Conclusion

In a hypothetical scenario where the wQSR pool size increases to 1 million QSR while the orbital emissions allocation remains at 12.79%, the APY for the wQSR pool would decrease significantly, approximately halving to about 5.84%.

Given that impermanent loss (IL) is considered less important in the wZNN/wQSR pool, should we consider a 5.84% APY sufficient enough for liquidity providers?

Please share your thoughts on this.

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36

5.84% is too low IMO. Impermanent Loss does not go away. We just think the wZNN to wQSR ratio will remain 10:1. But what if it goes to 3:1?

37

Orbital is funded at 2:1 QSR:ZNN
Circulating supplies are 3:1 QSR:ZNN

There are still big bags of QSR being swapped p2p at 10:1 and 9:1. There hasn’t been a situation where someone who wanted to purchase QSR, hasn’t been readily able to.

The p2p market is still efficient and given the token supplies, orbital ratio, and the upcoming launch of utility on NoM, it would be wise to wait until QSR has more opportunity for price discovery. 10:1 references all the way back to the alphanet inception.

We don’t even have decent volume on wZNN. I don’t see the purpose of depleting or spreading Orbital reserves to incentive a market with so little use at this stage.

Furthermore, from a marketing perspective, we have so much jargon flying around for a network that is often described as “too confusing”. I suggest we try to simply say “Zenon” and “ZNN” as much as possible until we gain more traction. We are already spread so thin.

p.s. The tiny QSR LP on ETH supports a QSR buy for max plasma. The only problem is that it’s fee inefficient. Maybe we can get those LP’s to move their liquidity over to xQSR/xZNN.

QSR is inherently a few levels deeper into the rabbit hole anyway. When a new person asks how to invest in Zenon, we don’t want to be leading with, “Well the NoM has a dual token ec… :skull:”.

Q) What is NoM?
A) Oh, it’s this other name for Zenon. We also call it…

Q) You have two names? Ok, should I buy ZNN or NoM?
A) ACTUALLY, the other token is called QSR…

Q) What is NoM?
A) The Network of Momentum, which is also Zenon. But in the whitepaper it is sometimes called the momentum network.

Q) Have you heard of HBAR?

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