[DCP-7] Extend SushiSwap Liquidity Program

Summary

Last year, DappRadar DAO was able to ensure stable price action on RADAR by accumulating $1M worth of liquidity on Ethereum, with SushiSwap as our main decentralized exchange. With the most recent extension of liquidity provision rewards coming to an end, it is necessary to reevaluate our current incentivisation program on the SushiSwap DEX.

In this Proposal, we propose to continue the Sushiswap rewards at a reduced rate.

Motivation

SushiSwap and Crypto.com Exchange are leading in terms of volume for RADAR trading and it is important to have centralized and decentralized markets with liquidity. In decentralized markets, rewarding Liquidity Providers (LPs) through farms is important. Although it has a significant cost to DappRadar DAO, it ensures lower slippage and deep depth of our market liquidity, which attracts more RADAR holders. We want to maintain the traction on SushiSwap in regards to liquidity providers and liquidity depth moving forward to ensure a stable value of RADAR.

Abstract

Last year, we had three SushiSwap campaigns decided upon by the DAO. We allocated 190M tokens as rewards for liquidity providers to ensure that RADAR had a stable price and depth. We were able to grow to 213 liquidity providers.

By working with ApeSwap, we were able to reduce the number of RADAR rewards used by 213.5M, increasing the efficiency of our cross-staking program and making the liquidity allocation more efficient with ApeSwap. This means that we are able to sustain the rewards over a longer period of time, giving more opportunities for new liquidity and users to hold RADAR and become part of our DAO.

As mentioned in the previous DCP-4, when deciding the number of rewards for liquidity providers, it is important to consider how that will affect the liquidity in the pool, the token price, and the benefits for the DAO too. This is even more vital on Ethereum where the gas fees are generally higher compared to other chains. Additionally, we are in the process of updating our Tokenomics in regard to gamification, staking and operational costs. Therefore, we are continuing to monitor these revenues and costs while evaluating other sustainable liquidity programs such as our ongoing Treasury Bills campaign with Apeswap.

We have been running our Liquidity Mining Programs on Sushiswap for ~12 months and at the time of writing, the RADAR-ETH pool on Sushiswap has ~$1M liquidity. The ending date of our most recent SushiSwap’s Liquidity Mining Program will be finishing in January.

For the next extension of LP rewards, we would like to once again use the remaining unclaimed Airdrop tokens and reduce the previously allocated rewards for Sushiswap by 20% to extend farming on SushiSwap 2x Farm for 90 days (3 months) with a reduced total of ~25,600,000 RADAR at a rate of ~284,445 RADAR per day.

Benefits

  • Extending the rewards for loyal RADAR holders and LPs on the Ethereum chain
  • Maintaining our cross-chain narrative by ensuring exposure to Ethereum users and investors to gain access to providing liquidity to DappRadar
  • Maintaining and potentially increasing liquidity in the RADAR-ETH pool while optimizing the costs and enabling low slippage for DEX trades

Drawbacks

  • The potential drop in liquidity if rewards are reduced
  • Distributing a large proportion of RADAR tokens that could be used for other initiatives

Vote

  • FOR - Extend farming on Sushiswap 2x Farm for 90 days (3 months) with a reduced total of 25,600,000 RADAR at a rate of 284,445 RADAR per day
  • AGAINST - Do not extend farming on Sushiswap 2x Farm

0 voters

23 Likes

I voted in favor of the liquidity extension.

  1. we are still using the unclaimed token rewards for that. And therefore the “giving RADAR to community” story still goes.
  2. we need liquidity on Ethereum and SushiSwap is important.
  3. the reduced rate could be interesting for the price, but not sure if a lower APR will help in discovery. We’ll see… it’s “only” 3 months. We can change it on the next extension.

Couple of things though

  • On Ethereum we are on Sushi, not on Uniswap. So that’s the number 4 DeFi dapp according to the DappRadar Rankings. Of course aggregators like MetaMask Swap and 1inch also include us. Nonetheless, we’re missing out on Uniswap activity. That’s 200k users per month across V2 and V3, versus 21k for Sushi, 53k for 1inch and 89k for MetaMask.

  • Then move to the BNB Chain, and we see ApeSwap in 3rd place with almost 50k UAW in 30 days. At the same time PancakeSwap has 1.39 million UAW. If we’re talking about exposure, it feels like we need to be on PancakeSwap too. Again, 1inch is a good aggregator on BNB, but PancakeSwap feel important in that ecosystem.

Ash (on our Discord) made a mini RADAR-BNB pool on PancakeSwap. Perhaps we can set something up to create more liquidity there as well.

14 Likes

pancake swap liquidity is important its one of the few company’s i see so far that has cut its APY staking Massively to what i am use to seeing in the crypto space. (to a more realistic apy tho still generous) i also seen it go though some massive changes since i first saw it. I think it will survive. not saying anything bad about ape swap they have loads of things going off on there side and they offer alot for radar and im glad they are there…but pancake swap is number 1 on bnb simple as that more eyes.

6 Likes

We hear you, but this has nothing to do with BNB Chain. As it is written in the proposal, the biggest amount of token holders and trading volume is on Ethereum and it is critical for the price stability and low slippage to keep the liquidity on-going on Ethereum blockchain.

On BNB Chain there is the ApeSwap Treasury Bill campaign which is on-going and it gives the DAO the ownership on the liquidity, but this is a totally different topic to what the proposal is covering.

2 Likes

96%FOR - Extend farming on Sushiswap 2x Farm for 90 days (3 months) with a reduced total of 25,600,000 RADAR at a rate of 284,445 RADAR per day

2 Likes

The Forum Proposal passed with an overwhelming community consensus, and so the Snapshot vote is currently live:

https://snapshot.org/#/dappradar.eth/proposal/0xd97a57f6ce8281f2ffe2d08eeb8f0c77765b21aa53cc710260097386df16e27d

Get to voting :ballot_box:

1 Like

Screenshot 2023-01-18 at 11.10.12

Snapshot vote passed :white_check_mark: Thanks to all getting involved - Nearly 150 votes is a big feat