Targeted DeFi Rewards Program (Algorand GP6 vote)

Looks like there’s going to be an Algorand governance vote about a 5M ALGO boost to a Targeted DeFi Rewards Program, I’m guessing it should be something similar to the Aeneas Rewards.

According to the initial proposal (see link below, it might change in the meantime), every DeFi platform will be awarded an extra 7500 ALGO per 500k ALGO TVL, capped at 1.5M ALGO

I think this is a good measure overall, Algofi already has something like this at the moment through BANK, which incentivizes the usage of lending markets and so on, but throwing a few more ALGO in there is actually a good idea to gather more liquidity and TVL.

I guess I just wanted to kickoff the discussion and ask what do you guys think about this measure and how the extra ALGO should be distributed


Great discussion to start @Stricken. imo we should spend it incentivizing the USDC lend pool and the STBL2 stability lendingpool. I think the governance vault already has enough of an incentive to attract users (its by far the biggest source of TVL). Attracting USDC liquidity is important as relatively we don’t have much of it. I could also entertain an argument for giving it out to those who borrow STBL2. That might increase the circulating supply and increase the size of the stability pool at the same time. Anyone not using it in the stability pool is probably longing another asset which is good for the ecosystem.

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Yeah, I agree! Gathering more liquidity around USDC and STBL2 should be a priority, and I’d add ALGO in there too because most of the liquidity ends up allocated to leveraged governance, this would further incentivize borrowing/lending ALGO.

I agree the vault has enough incentives for the moment, most users will keep using vault due to the DeFi governance boost and BANK emissions

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would unfortunately just lead to rehypothecation


That is a good point

Stability in our stable coin is our prime mission. Rewards should target this by promoting the rewards of the USDC/STBL2 pools. ALGO | STBL2 is another pool that supports an increase of liquidity for a high usage pool in our ecosystem.


to revive this topic as we are close to the end of the period:

an easy way to distribute the extra ALGOs would be to use the BANK allocation. i am personally not a fan of this because of the low percentage allocations to STBL2 farms which might get hurt because other DEXs will use all their ALGOs for such farms