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Let's do a Liquidity Mining Campaign!

Hello everyone,

It seems clear that xDAI has underperformed compared to other L1s and L2s. At one point, we were on par with Polygon network in TVL and usage. Clearly, there has been something lacking in our execution. I think the rebrand and Hard Fork coming up are an excellent start, but we should also consider one more thing: liquidity mining.

Liquidity mining has proven to be a massive success on other chains. Avalanche, for example, put aside $180M in incentives for its DeFi ecosystem. Polygon has also had its own liquidity mining programs, like distributing some $40M in incentives for AAVE users on its network. L1 chains like Harmony, Celo and Fantom have also pledged hundreds of millions of dollars-worth toward bootstrapping their network.

We can’t discount this bootstrapping strategy. Frankly, it works. All of these chains have risen dramatically in usage and users since the incentives were put in place, and they’re not slowing down. Capital is flowing to these networks at rapid speed.

We need to compete, and there’s no reason we can’t. We have a stellar product. Liquidity incentives would provide us that nudge we need to really take off as a leading L2 network. Frankly, it is an achievement we have $400M TVL with no incentives at the moment. Yet, we could easily reach multiple billions of dollars in TVL with some STAKE emissions for key protocols in the xDAI ecosystem. The reward far outweighs any reservations in my mind.

At this moment, I think it would be smart to capitalize on the momentum currently with us and use this opportunity to dramatically boost our profile. There is no reason why xDAI has lagged to much behind other L2s and L1s. We have the technology and everything is fine-tuned and working so smoothly. Now it’s time to mass onboard users and create an incentive structure that will boost our visibility in this hyper-competitive market.

I propose we brainstorm a liquidity mining program that will correspond with the big news scheduled for November 11 (the long-awaited hard fork!). I look forward to hearing all your thoughts.

Agree that liquidity mining attracts capital and users, but sometimes it’s short lived (like knc on Matic). But anyway, its an good advertisement to attract ppl to try the platform. That’s why I am glad we already have it (sushi) and will have more (agave starts next week and we have the symmetrics proposal). No doubt that it will give more traction.

Totally agree. It has to be done smart. In reference to Kyber Network, frankly it is a DEX is that falling in usage. It was far less effective for them for reasons beyond just liquidity mining.

However, since we’re an L2, it would benefit us tremendously and really make us visible in this market. I would suggest we announce a fund to bootstrap the network (with a specific amount of STAKE put aside for this) and open up submissions for potential collaborations. It would create a crazy amount of buzz, I can see it already. Coincide it with the upcoming hard fork, we’d see some fireworks.

Just my two cents.

Not sure if we need a special fund for this, last examples show that the community fund is open for these collaborations.

How large is the community fund?

Oh, I see. The communication on this has been sort of lacking then, because I had not really seen it around and seems to be given out piecemeal.

Would be much better if it was something like, “We have set aside X amount of STAKE for this fund to bootstrap the network…”

Agree, took me also some time to find all the information when I started to explore xDAI last year, but to me it seems more a problem of today’s behaviour with Telegram and other channels…if you don’t get the info right away it’s often missed although the links are available. Too much input in short time, at least for me who grew up without internet :thinking:

Take a look at this post discussing kpi incentives for attracting liquidity to xdai. The community seemed supportive of trying to bootstrap somewhere between $10M-$50M in matchign incentives.

here are 3 proposals that have just gone to snapshot:
Symmetric $100k
Elk Finance $125k
Agave Finance $500k

Sushiswap has already requested $1M 1 for 1 match. Curve finance is already incentivizing xdai with $1M in $CRV rewards. I know of another half dozen projects discussing to apply for some of these matching xdai rewards. In addition for a push to try and attract the building of some creative projects like olympus pro, some auto compounders, bridges, etc. I don’t think right now its a mater of not accepting, it’s a mater of trying to get more projects requesting rewards that are unique projects that are not your standard uniswap fork. If the project is unique, the project is matching rewards, and they are supportive of using some form of kpi metrics to ensure the incentives are driving the right results it seems the community has been supportive.

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This sounds great, thank you for information. I suppose it is just poorly articulated because I had no idea the bootstrapping fund had this much STAKE in it (around 4M STAKE I believe). I think reiterating that we have this fund on Twitter + a medium post would go a long way. Easy way to get some buzz.

I’d be 100% on board to provide some liquidity mining services in support of this. Sounds to be both a great idea for the intended goal & also I would love to see more adoption of xDAI as it really does feel like it gets overlooked by comparison to the alternatives.

I don’t know/can’t say for certain at the current moment, but I am already on a dev team working on automations and I am wondering how much of the community users we have would be interested in partaking in something such as this. We are probably in the numbers of about 150 users right now, but this is early stage. Granted all of our users are focused on payout/risk:reward portfolios using our dual momentum strategies. So it may be a hard pitch to make, but I will discuss it with the other devs & see what the say.

Now, I will admit that I am in a pretty nuanced area over here on these forums. Not really aware of how something like this would work, but essentially I would like to ask what kind of incentives might be in store for users who choose to partake? If that’s a reasonable question, or really I guess I mean, if that’s something to reasonably expect could be addressed at the moment.