It is important for Wingriders that the value of the WRT token rises in order to attract higher TVL. We are aware that the trading volume is still low to generate the necessary fees to reward WRT holders while financing the development of the DEX. Therefore, I propose an intermediate solution:
Vote on allocating 0.1%, 0.2%, 0.3% to WRT holders as certain trading thresholds are reached per week. So that from a certain amount of traded volume, for example, 2 million USD, the amount assigned to WRT holders is 0.1%, the week that 3 million USD is reached it is 0.2%. and the week that exceeds 4 million in USD is 0.3% (the figures are totally random and flexible to other opinions).
In this way, ADA rates would not be immediately distributed to WRT holders, but the declaration of intent would be made and the construction of the necessary infrastructure would begin.
The person who knows that the WRT will generate ADA will give a higher estimated value to the WRT than if they do not know what an investment will be used for.
I like the general idea of setting tresholds and distributing part of the fees to the WRT holders, if there is enough of them.
But I would set the thresholds in ADA, not USD.
Also, buybacks seem to have bigger impact on the value than dividends for money spent. And buying back the token is easier to execute than airdrops.
ok, interesting idea! I like the tiered structure of it so the rewards would be depended on overall higher trading volume. few things that come to mind:
this would be Ada rewards distributed to any and all WRT holders based on recent overall trading volume on the DEX?
the rewards would come from the swap fees currently collected and distributed to LP providers and treasury? or somewhere else?
to add to the point above, current swap fee for regular constant product pools on the DEX is 0.35%) from each fulfilled request. from this 0.30% is directed back into the pool for liquidity providers and 0.05% is contributed to the protocol treasury. for anyone looking to confirm this breakdown is available to view within the swap window when making a swap.
if the rewards are to come from these fees it would mean having to increase this swap fee or introduce an additional fee collected for WRT holders. this too is an interesting idea but would mean a slight increase in fees for any swaps made. for transparency I would personally like to see this added as a separate fee so it could be included in the breakdown for swaps and visible to users.
p.s stableswap pools have smaller fees (0.05% back to liquidity providers and 0.01% to protocol treasury).
finally from a dev perspective I wonder if reward distribution based on WRT holders and trading on the DEX like this would require adding a staking mechanism, or if alternatively the WRT vault could be used to distribute these type of rewards back to WRT token holders? This would require the WRT holders to deposit WRT into the boosting vault. for this it would be best to get some insight from dev team about what’s possible to implement and what type of design is needed.
as mentioned if there would be a change or addition to the current DEX fees, this would definitely be a DAO Proposal vote in the making. let me know if missed anything. Thanks for posting!
" this would be Ada rewards distributed to any and all WRT holders based on recent overall trading volume on the DEX?"
Yes
the rewards would come from the swap fees currently collected and distributed to LP providers and treasury? or somewhere else?
My proposal is that they come from the percentage allocated to the treasury, hence the idea that as long as there is not enough volume of trade to make it possible to finance the treasury and there is room to distribute 0.01%-0.02%-0.03 % in a staggered manner so that ADA is not distributed but that in the meantime the infrastructure is prepared, a proposal is built and approved and advertised as a way to increase the value of the WRT because we know that when the day comes it will serve as a way to perform ADA.
“stableswap pools have smaller fees (0.05% back to liquidity providers and 0.01% to protocol treasury)”
For stableswaps the fee allocated to the repurchase of ADA for LQ holders would be equal to 10%, then 20% and then 30% depending on the total trading volume in Wingriders.
It would be interesting to have the option to deposit in the vault as a requirement and have several temporary WRT blocking options to receive a performance boost from ADA: 1 month, 3 months, 6 months, 1 year, 2 years… for me 5 years okay it would be my option
At first read, i thought this was a proposal for awarding top volume traders. Nice questions ilkka.
This actually seems like a good proposal TNT, but is it worth it for the team spending time to implement it? What i mean is, are there enough reward fees to be collected? What about community batchers we already should have had? What is going to be left for them? I genuinely ask, not rhetorically, since i don’t know what’s left for rewards while keeping fees competitive.
thanks for the replies! helped me to understand it better. I think @Esen_GR raised this point about where this rewards allocation comes from in previous comment already but I’ll echo it…
if the plan is to allocate a small portion of the treasury fee which is already only 0.05% per swap when we take out the portion that goes back to the liquidity providers, 0.3%, the rewards are bound to be very little per WRT holders if anything if you were to take only a 0.01% or 0.03% percentage of already 0.05% fee percentage?
so from my point of view, I would suggest adjusting the fees somewhat and making the WRT holders distribution fee something separate.
this could be added into the current fee structure and breakdown in the swap window as a new addition = transparency and clarity
the benefit for WRT holders would be clear and easily visible to all
now the question then would become what would be a reasonable fee to place per swap to distribute rewards back to WRT holders. 0.01% to 0.03%, or even 0.05%? would need to look at other DEXs for comparison to make sure it remains fair and competitive. e.g. Minswap gives liquidity providers 0.25% when Wingriders gives 0.3% so I think there’s some room to move and adjust here? even adding a WRT holder fee… of course this might also mean adjusting some of the other fees. we’d just need to find a good balance for community to agree on.
I think there’s a lot of potential here to work something out but I personally do prefer the idea of making this into a separate fee (small enough to still remain fair and reasonably competitive).
If I understood it correctly, the ultimate goal with this proposal is to create demand for the WRT token and thus increase its value.
Wrapping all the ideas here, IMO we could go with the following:
Deploy community batchers;
Deploy the possibility of paying batcher fees with WRT;
Establish a buyback policy:
3.a. Adjust the liquidity providers fees from 0.30% to 0.27%;
3.b. Create a new fee of 0.03% to fund this policy;
3.c. Define the recurrence of the buyback action and also the threshold of it in ADA value, so it doesn’t end paying fees for very low amount of tokens to be bought.
The reason why I put community batchers and batcher fees being paid in WRT as features with higher priority, it’s because it could have a greater impact in the WRT price right now. At the moment, trading volume isn’t that big, so it’ll probably play a better role in the future. So I agree with @Esen_GR.
Like @ndrjkvc said, I would go with buyback, because it’s probably easier to be implemented. It’ll have the desired effect (or even better?) while also not taking too many dev time allocation.
For the fee amount, I went with what @ilkka said: Minswap gives just 0.25% for liquidity providers, so even if we get a 0.27% fee, it would still be competitive in a LPer perspective and it also wouldn’t increase overall fee for the trader as the total fee would still be 0.35%.
With this data we can modify the rate for liquidity providers to 0.27% as Lucas proposes or to 0.25%, which is what Minswap has and leave the 0.05% tranche destined for the treasury unchanged.
We must separate the different proposals into different conversations and different votes. That said, I agree with you on the priority of decentralizing the dispensers.
Back to the topic:
If we pay WRT holders in inflation WRT plus buyback WRT, the actual performance impact of the token is not seen as if it were paid in ADA. Additionally, there would be no buybacks or fees to pay because fees are already paid in ADA so that would be ideal. Personally, I would be more interested in repurchasing WRT if it produced me ADA indefinitely.
The rate created to reward could be 0.03% or 0.05%, this is open to hearing arguments for and against both and I think it could also be voted on.
I think there is content for a successful proposal and room for dialogue. We are agreeing on positions and building the DAO proposal.
Hey! Indeed, I also believe that if community see ADA being paid because they hold WRT, this could bring more impact than simply increasing the WRT value via a buyback policy.
IMO, a rate of 0.03% would be ideal so we could keep a better incentive to liquidity providers, but I think the best way of deciding it would be giving both options in the DAO proposal.
Let’s discuss then about the possible voting options of the proposal:
Reduce the LP fees to 0.27% and create a 0.03% to fund dividends to be paid to WRT holders;
Reduce the LP fees to 0.25% and create a 0.05% to fund dividends to be paid to WRT holders;
Don’t change anything.
I would also put a 500 WRT reward for you (10% of the current 5000 WRT needed to create an on-chain proposal) if the voting succeeds for the risk of vesting of the funds locked in case of unsuccessful voting result.
ok and let me know if this was addressed already but I’m thinking… if this new fee per each swap for WRT holders would be implemented:
how would this fee get distributed to WRT holders?
what frequency would it get distributed and available to withdraw?
could we use existing things like boosting vault or another solution?
how would WRT holders be verified? do the tokens need to be deposited into vault or somewhere to make you eligible?
I think we need to leave some room here for dev implementation if required but I’m just trying to picture this in action and have something defined for a potential DAO proposal to be put forward
It would be done through the impulse vault to boost it even more and the harvest would be done at the same time as the entry of the WRT. Then each holder could withdraw the ADA whenever he chooses. There is also the possibility of sending ADA directly to the user’s wallet every 5 days with a minimum of 10 ADA, for example.
Temporary blocking periods would have to be established that would multiply the rewards, for example:
What do you think is a better idea to send the ADA directly to the Wallet every 5 days (minimum 10 ADA) or let the holder harvest them whenever they see fit from the impulse vault?
New WRTs automatically received in the vault would be automatically locked with the same chosen lock period (time remaining) and would also produce ADA with the same x2, x3, … x10 boost.
However, WRTs added manually from a wallet would start counting from zero on the clock with a new blocking period chosen.
There will be the option to harvest all the ADA generated with a single click
After first reads, batcher fees would remain unchanged so the base incentive for community batchers will be in tack. That said, glancing at September monthly recaps, the current amounts may not be enough to justify team overhead costs (there are hundreds of pools) for executing the proposal epoch to epoch or at another frequency.
Yep, I tend to think that buybacks (and burn?) can have a better impact within current market conditions. I didn’t come with receipts or statistics to support it but it can bring a consistent mechanism to absorb negative, dynamic price impacts.
