The liquidity campaign for wZNN has been succesful in bringing both ETH and wZNN in the Uniswap pool, but it seemed to have caused liquidity implosion to some degree as well. Clearly, it has also been an interesting subject for the marketing community.
And if we decide to do an Orbital campaign for the wZNN/wQSR pairs, this would mean existing community members would be able to participate without having to swap wZNN or wQSR for ETH.
So, should we do another campaign?
If yes, here are some of the aspects that need to be decided:
How much of the Orbital reserves should be distributed?
How should the multiplier be calculated based on the amount of liquidity in the pool?
Uniswap is a familiar venue and a low friction path for new users to aquire QSR. Ideally there woud be enough liquidity for new infra. Wouldnt a window of Orbital incentives to build the liquidity to a reasonable level make sense?
Not another 10%, a fraction of that would do it but maybe 3-6 months of rewards and we can see where the market/interest is at from there.
Ive already said this but today wQSR/wZNN looks like the more accesible lp option.
If you don’t have a liquid pair for ZNN you wont have significant demand. As we don’t have that for ZNN I don’t see a QSR pair being beneficial in any way.
Why not start with a small allocation of orbital rewards to a wZNN/wQSR pair.
Let the market fill the LP to what I presume will be an effective APY of ~30%
This way, it looks and feels good that we have a Uniswap pair. If it proves to be important, we can expand the rewards in order to deepen the LP.
More likely, I think a small wZNN/wQSR LP will serve its purpose and p2p swaps will serve those looking for larger scale amounts of QSR for infra.
I think there is some broader advantage / balancing act to having more pairs. My sense is that a relatively thin wZNN/wQSR pair will be the best balance of interests.
Please check my knowledge but I believe an LP of $50k would enable a user to make a $1,000 trade with 5% slippage. This, with native p2p swaps would seem to suffice and enable a phase for observation which will provide intel for where to go from there.
Thus, I’ll suggest an orbital reward rate that equates to 30-60% APY in a $50k LP.
Impermanent / permanent loss is less relevant than it would be in an ETH pair, because the pair consists of wZNN/wQSR.
I like the idea of allocating a tiny fraction of the rewards, just to get the ball rolling, and aliens talking about it. We might lock $50k liquidity for 1 year for 5% APR while being exposed to some impermanent loss (arguably less due to wQSR/wZNN hopefully moving more in tandem). We, people, are stupid like that, we just like to farm.
5% APY would be an irrational use of ZNN, when compared to staking or delegating.
If we assume that we aren’t competing with sentinels, and that QSR has no yield, then the minimum rational LP yield would have to be about 8% for the paired wZNN/wQSR which would be an effective yield of ~16% on the ZNN (0% on QSR which would be otherwise idle).
Another way to look at it would be to say that the LP should yield higher than a sentinel because a sentinel involves virtually zero effort and risk.
Haha, yeah I didn’t stop to do the actual math because my whole premise is most people won’t do it. And even if they do, and it’s just .1% higher, they might monkey into the LP without even considering impermanent loss, stake duration, smart-contract risk, etc, etc. Monkey see, monkey go.
It does sound reasonable to go for at least equal yield than the protocol.