Introduce Bonding Mechanism for STBL2

Proposal Staging
1

Summary:
Current ways to earn BANK include: LP and Single Sided lend and Earn Staking (USDC/USDT). BANK can also be earned on the lend platform (both on the supply and borrow side). There are currently no single sided BANK emissions associated with STBL2 (LPs only)

Proposal:
Introduce a bonding mechanism for STBL2. Users would commit STBL2 for a fixed amount of time. Initial durations would be between 1-3 months (with longer durations receiving a higher amount of BANK – to be voted on the monthly BANK emissions). In terms of unlocking the bonded STBL2, user could choose between a liner unlock or an unlock at the end of the bonded period — higher compensation for electing the end of the period.
Benefit:

Increase both the demand/stability for STBL2 as well as liquidity on Algofi

Temp check : HERE

  • Yay
  • Nay

0 voters

2

Revised Proposal based on additional feedback

Introduce a bonding mechanism for STBL2/USDC. Users would commit STBL2/USDC LPs for a fixed amount of time. Initial durations would be between 1-3 months (with longer durations receiving a higher amount of BANK – to be voted on the monthly BANK emissions).

In terms of unlocking the bonded LPs, user could choose between a linear unlock or an unlock at the end of the bonded period — higher compensation for electing the end of the period.

Benefit:
Increase both the demand/stability for STBL2 as well as depth of liquidity on Algofi

  • Yay
  • Nay

0 voters

3

think it makes a lot more sense to incentivize sth like STBL2-USDC than just STBL2 or just USDC because its a lending pool so it serves two purposes: DEX and lending market liquidity, good change imo

do you have any idea on how much BANK emissions it should have compared to the normal USDC-STBL2 “farm”? its hard to vote yes or no imo without an idea on how the durations would affect the BANK rewards

4

As a starting point, if STBL2/USDC is at 32.5%, the premium needs to be higher than the simple daily APR. A 5% premium on 1 month up to a 20% premium on a 3 month could provide the incentive. This would ideally be a continuous/linear reward curve. If that is not feasible – their could simply be 3 buckets (STBL2/USDC 1 month, 2 month, 3 month)

Where does the BANK come from?

Suggestions:

  1. AlgoVault — I don’t think people elect to use the vault based on BANK rewards. Defi awards are plenty in their current form
  2. goBTC / goEth / USDT borrow — these rewards are already very thin – and likely not the reason why the borrow is utilized
  3. A less popular suggestion — take some from the current STBL2/USDC pool
5

to your suggestions:

  1. i agree but algofi governors werent happy with cutting it completely. a reduction to 5% seemed to be fine tho (down from 10%)
  2. imo having nothing for borrowing assets is a bit weird tho, the BANK rewards should be higher and not get reduced on these
  3. what if its handled like the staking contracts: people who use the bonding mechanism get more by reducing what the other people get. being able to use STBL2-USDC LP tokens as collateral + earning lending APR for USDC + STBL2 are already good features, maybe good enough such that a reduction in BANK rewards wouldnt be the worst
6

That all makes scene — I’m mostly interested in getting the bonding mechanism/contract in place – for the sake of the proposal – I think the initial allocation can be zero — the rewards component should be addressed as part of the monthly BANK allocation process.