Hi guys, this is the current situation for us:
To work as a trading platform, we are in urgent need of liquidity.
At this moment we are stuck on Polygon with a stable amount of around 45k USDT and more or less 50k USDC.
Nothing came in after the start of rebrand organically - But we really need it ! Be real, even if we have 100x what we have now, it is not good enough.
Now we will start expensive marketing and to start it without liquidity, its not good thing.
Situation in the market:
As we are active in several markets allow me to compare us with different platforms on the market doing lending/borrowing and margin trading.
Let me compare our current lending protocol to :
Maker - you put down your coin, and they will give you DAI at low and predictable rates. But this DAI you can use in DeFi to generate yield.
Aave/Compound/dforce - they offer lending and borrowing like we do, but with a difference. You can use your deposits as collateral and take out loans. And on top of that, they reward the user with farming rewards, which cover the interest to be paid in most cases. If you take this into account, you earn both interest and rewards on your collateral.
Also dydx pays trading rewards, based on different factors as paid interest and trading volume.
Now, let us ask ourselves one question, why should lenders give us their valuable coins ?
I see little reason at this moment, and so do other people according to our statistics.
What can we do ?
Offer rewards and later composability !
Even the industry leaders need to pay for liquidity - so do we.
Let’s talk about generous liquidity mining rewards first !
Be aware that this is not a permanent measure and only sustainable for a certain amount of time.
Ooki Reward Farming concept
As time is limited and we already have the old vBZRX farming in existence, I thought about how to tweak it.
A leveraged USDC loan will bring you around 15% interest on aave polygon incl. rewards. This means we should aim for around 20% APR on stables.
The concept can be considered as a modified version of old 2020 farming program.
We will introduce something I call “seasons” which is a fixed period of point accumulation and fixed rules.
I suggest a timeframe of 7 days for each season.
We introduce a variable called “booster”. Which is a tool to guide the incentives.
The rules of each season must be fixed in advance, think of a Fortnite season.
The advantages of a flexible rule set are : We might need to adjust our incentives and emissions to a new reality.
Ooki farming Idea - The short version :
We keep the model of vBZRX-farming - a fixed pool of rewards split to the users who earned the reward points in this season.
Pool will be divided after the end of each season according to the percentage of points a farmer collected.
It is more or less the same as our old farming model.
Math in easy words :
Points are calculated based on value and blocks. Multiplied by the booster.
All points are summed up and represent 100% of the epochs reward.
User receives his share like a percentage of the total.
Possibilities of the booster :
With these boosters we can adopt to new scenarios and change user behavior to a certain degree.
Adjustable rules :
Booster is available for Lend, Borrow and Trade. Additional boosters could be (non)profitable trades, assets like USDT, or even the chain itself.
The amount of Ooki emission can be adjusted to match the targeted 20% APR (including interest). This might be the case if Ooki pumps, dumps or the interest rate gets healthy on the platform.
Example of dynamic actions :
First season :
we start with booster 3 for Lending - the rest booster 1 - because for the start we need $$ - liquidity.
Now we will get in a lot of $$ liquidity, because of the booster - but it is unused.
Second season :
Booster for lending 1, booster 3 for borrow/trade - which should result in higher usage of the funds.
With increasing usage of trading platform, the interest rates get healthier.
We can cut Ooki emissions, because interest rates are healthy and reduce booster for borrow/trade to 2.
Worth to mention:
Rules of the new seasons will be clearly communicated.
A panel with statistics, rules and reward estimation must exist.
Total allocation of funds :
600m Ooki - should be same amount as the 2020 farming - off which the majority should be used for Polygon.