Ideas for an ooki liquidity mining program

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.

  • Third season:

  • 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.

Thanks for starting up the discussion, hopefully we won’t be too late but at least we can get this out asap.

One thing that I’m not convinced about is the dividing of points after a season ends. Correct me if I’m wrong, but if you lend 10k for 7 days and I lend 420k for 4 hours, we would get the same amount of points… This is pretty unfair, my 420k has done barely anything to contribute to the health of the system

Another possible negative effect is that some people might “game” the system by moving millions in the last hour of the season to grab and dilute the rewards from long term liquidity providers while barely contributing anything to the system.

For this reason, I would prefer to see that rewards are being awarded per block, like almost everybody is using. It’ll also create HYPE, as the start is normally very lucrative.

On the other hand, I think rewarding the traders depending on interest fees paid would perfectly be fine using seasons.

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Hi Audax yes, Jokerbra had this covered in the proposal but its not there, just noticed it. To prevent any unfair rewarding of points we could reward like 1 point / 100 blocks per 100 USD or 0,001 point / block per USD plus the variable boosters for that season.

Well the person who gave 420k did in terms of amount 42x times as much as you did - but you did help timewise more 42x as much as he.
You did both the same bascially?

Why should this be unfair?

All of these whale effects you have in block by block rewards too, you just don’t see the exact numbers.

We could even add a booster for time to attract that behaviour!

Think about, what happens, if a whale comes to your sushi farm?
You are fucked, if it is a low liquidity pair.
If it is a liquid pair like USDC/ETH you will not even notice his 5 millions.

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The time that the liquidity is available, is of utmost importance.

To illustrate this, thinking in extremes will make it clear:

1 second of multiple billions of liquidity will receive almost all the rewards
a few hundred thousand during the whole period, but they barely will get any rewards

The result: the people that have given the liquidity that actually has been used by the protocol, are disappointed with the rewards and are removing the liquidity because it’s being gamed in the last second.

We really don’t want to reward anything to those multiple billions, because why pay for something that’s not beneficial to the protocol?

Time should be rewarded, and long term commitment even more. I know a protocol that is giving more rewards the longer you stay in the pools, this is exactly what we need, but there’s no time to implement something like this.

The best thing I think we can do is implementing the old farming protocols that we already have used before and are quick to deploy:

  1. The vbzrx farm with seasons for the traders/users of the protocol, depending on the interest fees paid, up to a maximum of 100% in usd terms.

  2. The bgov/pgov farming for the lending pools, with a vesting schedule for every pool

What about a minimum timespan? Like starting with a handicap.

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Yes, the withdrawal penalty will prevent that problem, like dfk has:

  • 0.01% fee if a user withdraws after 4 Seasons

  • 0.25% fee if a user withdraws after 2 Seasons but before 4 Seasons

  • 0.5% fee if a user withdraws after 5 days but before 2 Seasons

  • 1% fee if a user withdraws under **5 days. ***

  • 2% fee if a user withdraws under **3 days. ***

  • 4% fee if a user withdraws under **24 hours. ***

  • 8% fee if a user withdraws under **1 hour. ***

  • 25% slashing fee if a user withdraws during the same block.

If we set a handicap like 1000 it is easier to code.

Everybody start with a handicap of -1000 blocks - only after 1000 blocks it will get a positive sum, everyone who has his deposit shorter than 1000 block will not generate a positive point amount.

I completely agree with the above discussion.

It looks to me like jokerbra’s proposal with some modifications suggested by Audax to account for the time value of liquidity will work well if one of you guys can write a combined proposal.

I have a few additional points/questions for discussion:

  1. How will the Curve pools being worked on now affect the above? If successful they will bring in significant liquidity by themselves - Curve is on both Ethereum and Polygon. Will this be in addition to Curve pools and bribes? Or only networks without it? Or only until the Curve pools are active?

  2. Joker’s suggested a 600m Ooki/60m BZRX figure for liquidity rewards. This is high but given the importance of the rebrand it’s probably worth it. But the Treasury currently only has about 40m (roughly) BZRX which will be converted to Ooki, plus 350m vBZRX which will vest into BZRX at the rate of about 7m BZRX per month (which will convert into 70m Ooki).

Keeping this in mind, how do we afford to spend the rewards, and how do we split them up.


a. How much to spend immediately from the 18 Dec?
b. How much to save for future developments (Fulcrum Pro and PL especially)?
c. How to split rewards between Ethereum/BSC/Polygon now (and Optimism and Arbitrum later, and StarkNet etc much further in the future)? My opinion is that Polygon should have the highest priority followed by Optimism/Arbitrum when launched there, followed by Ethereum mainnet. BSC is not that important and StarkNet is far enough in the future we don’t need to worry now. But exactly how much to split between the networks? For what time period?

This should start some more discussion about the details - I’ll post more if I have any further thoughts.

We will have a toolbox available to adapt to this new situation in the coming seasons.

I suggest start with a high budget of 30m-40m ooki in the first season and see how things settle. I hope we can go down to 10m per week within 1 month.
If we allocate 300m of the 600m for this farming, we will be able to sustain it around half a year and have 50% left for other chains.

If Pro and PL happen soon™ enough (with 6months) we can include them anyway.
If they take longer than this 6months, I don’t even want to think about that.

Can someone from the team comment on the ideas here and how they might interact with the ideas for Curve liquidity? And also whether we might want to give Ooki rewards for Ooki single-stakers (as with BGOV/PGOV) in addition to liquidity providers?

I think it would help a lot to have this input to make sure the discussion is connected to what’s actually being worked on, and the discussion isn’t happening in a vacuum.


Agree, I would also like some input from the team on this matter.

Personally I think Curve will still work great in the future to get liquidity on eth mainnet, and in the meantime we can use the farming only on polygon (for now).

The liquidity of Ooki on a DEX is very low, not sure if that’s a huge problem for the team. If it is, we can try tokemak as a solution for that, or add a farming pool on a DEX at polygon chain (we got offered to open an LP on a new DEX with additional farming rewards, that could be interesting).

Ooki single staker pool may need extra Ooki rewards to make it interesting to stake while we wait for the platform to ramp up the useage and generate sufficient revenue for the ooki stakers. I would be in favour of a temporarily boost here as well, it’ll become more attractive to stake.

Yes, the point of (potentially) doing Ooki single staking is to reduce the selling pressure on Ooki from yield farmers who farm Ooki in the stablecoin pools and dump (there is already a reason to hold Ooki to get a share of platform fees, but it may be worth temporarily boosting yield farming rewards as well).

I have been thinking about Tokemak for a while now (for the OOKI-ETH pair - stables will be through Curve) but it’s not a huge hurry. It will take time anyway - first we need to wait for next Tokemak Reactor voting round and then win a place in that (difficult - can take more than one try and is expensive) plus actualy Tokemak liquidity provision is only beginning in mid-late January when they complete audits (for now you can deposit assets and earn TOKE at a good APR but they haven’t actually started providing liquidity yet).

Overall a great idea but no hurry basically. Lots of things to do before then, particularly Curve liquidity and successful Ooki token launch.