DHF proposal to incentivize SWAP.HBD:SWAP.BUSD pool

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(Edited)

We are all getting used to a new world of Decentralized Finance. Providing liquidity in pairs brings value to the network. As @edicted has been saying 'Infinite Liquidity is the Key to Growth'. On HIVE we have a growing Decentralized Finance Platform built on hive-engine, using feeless diesel pools. In just a few days they will experiment with fees to add some rewards to them.

There are several pools of interest, but the most important pool for helping to stabilize the price of HBD is the SWAP.HBD:SWAP.BUSD pool. If there is interest, I (or anyone) can make a similar proposal for the Swap.Hive:Swap.HBD pool, if this is deemed desirable by the community.

We know that stabilizing the price of HBD is important to the network. Apart from the work done by the HBD Stabilizer Proposal, we also have the recent implementation of the HIVE to HBD conversion within Hard Fork 25.

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Help keep HBD stable by incentivizing SWAP.HBD:SWAP.BUSD liquidity pair

VOTE HERE!

Right now, witnesses are targetting 12% interest rate to the savings account, so we can use this number to easily calculate how much funding we want to provide to liquidity providers of this pool.

Do we want 1 million dollars in liquidity? By targeting 12%, we can offer $120,000 in liquidity rewards for a year.

Each day this comes out to 329 HBD per day. We can increase (or decrease) this at any time. Please leave your feedback in the comments and I will make the appropriate follow up proposals in the future.

329 HBD per day to liquidity providers on the SWAP.HBD:SWAP.BUSD pool.

There is currently quite a bit of unspent money in the DHF, which is not necessarily a bad thing. But through solid plans we can create much more value than we spend.

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WHY BUSD?

BUSD is the Binance dollar stable token, it is run by Binance on their BSC Binance smart chain. Please check out this post by @edicted for a Binance clone alternative.

Binance and BSC is one of the top chains for Decentralized Finance experimentation, so much so that Splinterlands and LeoFinance are already there. SWAP.HBD:SWAP.BUSD is a bridge that is incredibly important to open us up to new users and expand the possible arbitrage routes into and through our ecosystem. We want people to be able to buy into our system as seemlessly as possible. If we want them to come, they need to be able to move in, and right now the HBD liquidity is terrible.

This is also a promising sink for HBD, we are incentivizing people to hold HBD stable tokens in a value adding LP position.

This proposal can be easily expanded in the future to target any level of liquidity we desire.

But I think its best to target $1 million USD first, as not to waste money getting started. It may take some time to attract the levels of liquidity we are dreaming about, but I could easily see $10 million + in that pool in the future.

How will it be distributed?

HBD will go to the @@@hbd.liquidity account, which will be distributed to the SWAP.HBD:SWAP.BUSD liquidity providers on a 1/30 basis, which means there will be a one month build-up time from the day this proposal gets funding. This will allow time for people to move their liquidity in response to the 30 day build up of total yield.

The distribution will be run by @gerber of the BeeSwap Team. He is one of the most well known devs involved in Hive-Engine and LeoFinance, as well as his own dApp - dCity.io. He runs similar distributions for BeeSwap, XCHAOS and dCity, he has the code already prepared to make this work.

I asked @gerber how much money we should set aside for his code, but @gerber is a true crypto gentleman, and all he said to me was:

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When will this start?

Obviously we need to get enough votes, but as this is a topic that has gotten a lot of attention, and this solution has also been proposed by more than one, I am going to let the discussion continue for just 2 weeks more as HIVE stakers vote if this is something they want to see on our network.

The proposal will run for one year, and so if it takes longer than 15 days to get the votes it needs, it will eat into the year.

The year will thus be February 7th 2022 until February 6th 2023.

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Cast your votes! Tell your Friends!

Its not every day in every way that we can actually participate in the solutions for creating the better future we want to see. I am happy doing my part talking to idealists and devs, and writing a post here and there.

But now its on you. Vote, or don't. The future will reflect the choices of the HIVE community.

Freedom and Friendship



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51 comments
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(Edited)

Please! Let's get this funded!

When I saw @edicted post I started thinking about filling a proposal myself regarding the HBD-HIVE pool but since I have no coding skills there's a 'trust' layer between.

If @gerber already has the code, then it's a no brainer for me. Let's get this!

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would be awesome, so I could increase my holdings :) currently 10% :D

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Bang, I did it again... I just rehived your post!
Week 90 of my contest just started...you can now check the winners of the previous week!
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That's a great idea. To have two stable coin paird on Hive could attract a lot of attention.

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Yes! I agree this is the best pair to start with.

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It's definitely a good idea to maintain the stability

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@gerber, would it be possible to also bridge HBD to Swap.HBD with BeeSwap, since it is quite expansive with HiveEngine, thanks in advance!

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I think its on the roadmap just a question of when and is it worth it. If we are boosting the bridges through HBD, I think it might become really worth it!

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100% agree. Let's get this funded.

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I would really like to see swap Hive:swap HBD as well as we need deep liquidity here for being able to make larger swaps!

thanks for all the effort!

@tipu curate

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I agree, let's get this funded and then go for that next! I hope another team also builds the internal AMM for native HIVE:HBD!

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Right now those working on Hive have provided HBD with an excellent base - Thank you.

However, they really have no incentive to take it to the next level and we need more.

This is a great start to taking HBD to that next level.

Thanks for doing this, you've got my vote.

Posted Using LeoFinance Beta

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I think this is a great idea. Having more liquidity is always something we should support and I do have some in that diesel pool as well.

Posted Using LeoFinance Beta

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Greetings, I already gave him my vote. I believe that this type of proposal will greatly benefit the performance and stability of our platform, providing good support to our investments. a 12% return is a good incentive.

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Well this is interesting .... :)

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I'm supporting this pending my being able to actually understand the implications! I find myself completely challenged always to figure out the long term prospects of something like this but it seems to me that having more markets is very good.... :-)

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I hold around 10% of the pool now. Increased returns would let me funnel more in :P

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In my understanding, the goal of this proposal is to mimic the Savings APR mechanism which should let liquidity providers earn interest without keeping their HBD on saving accounts (and thus allowing them to provide liquidity on the stablecoins pair). Am I right? If so, I don't like the idea as there is already an incentive offered by the pool itself.

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The point's not providing an APR to liquidity providers, it's more about 'incentivizing' a pool that will tighten much better the HBD peg.

For example, right now a simple 1000$ swap carries a 1-2% slippage, which is (if you allow me the expression) laughable.

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We'll never attract enough liquidity without incentivizing it, and after this step is done, the black hole will just keep feeding itself.

More liquidity -> HBD peg tights -> HBD gains utility (as a 'better' stablecoin) --> more eyes on us & user expansion --> more HBD printing -> More liquidity -> (repeat)

We'll need more liquidity in orders of magnitude to make HBD work properly. This proposal is only a starting point.

Additional benefits:

  1. Gerber already said that doesn't want retribution, and the code is ready. What better way to put the DAO's funds to work?
  2. Taking the HBD.stabilizer as an example, we can always increase/decrease the funding as we see convenient.
  3. Given that we're 'creating' a sink for HBD but also for BUSD, a pool with millions of BUSD into it could serve as a great starting point for @lordbutterfly to negotiate a possible HBD listing on binance CEX.

These are a few but surely I'm missing some. Bihg thank your for your work on the HIVE ledger app @engrave :)

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HBD listing we desperately need! This is an underrated point!

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I think hive as a network profits the most from that. IMO savings are worthless for the network.

Liquidity offers value. An onchain pool between Hive and HBD should be also offer way more value then pay simple savings.

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An onchain pool between Hive and HBD should be also offer way more value then pay simple savings.

We already have an internal market to trade HIVE/HBD.

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Impossible to trade larger amounts.

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@ecoinstant, man you've got my vote.

Although I fully understand the importance of having large liquidity here on Hive, I've not understood everything in this post. But I see many names in the comments of people that I respect that are willing to support. That's a big plus. And, I trust you and gerber as well.

I've just given you my vote 💪👍

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A must to attract liquidity on the other side IMO. Voted.

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Thank you for your witness vote!
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Thank you for your witness vote!
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Thank you for your witness vote!
Have a !BEER on me!
To Opt-Out of my witness beer program just comment !STOP below

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Thank you for your witness vote!
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Voted: I was actually thinking of making a proposal like this... But I don't know the ins and outs of hive-engine and how the distribution will be handled if @gerber wants to share a bit about that it would be helpful.

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(Edited)

I think that if the interest rate is increased a little more, there could be much more HBD transferred to savings by users.

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