Proposal #128

Add a bias factor to external incentive matching

Exec Legacy Content
passed
Expected result
Passed
Turnout / Quorum
21.75% / 20.00%

Voting period

Voting ended100.0%
Voting start 2022.01.22 at 06:43:48
Voting end 2022.01.25 at 06:43:48

Vote distribution

96.70%
43 591 494 osmo
Yes
0.29%
131 361 osmo
No
0.13%
59 762 osmo
Veto
2.88%
1 298 205 osmo
Abstain

Details

logo
Proposer
-
Total deposit
503 osmo
Submit time
2022.01.22 at 02:45:17
Deposit end time
2022.02.05 at 02:45:17

Description

If another project allocates incentives to a non-osmo pool, Osmosis right now matches its incentives equally to how it matches non-osmo pools. This comes at a cost to all of the 'main' swap-fee driven pool incentives. (As this is osmo rewards they are not getting!)\n\nThis proposal proposes that external incentive matching maintain the same bias factor that is used for all incentivized pools within Osmosis. If the bias factor system (or equivalent preferential treatment for certain base asset) changes as time goes on, the external incentive matching should adapt in the same fashion.\n\nRight now proposal 127 feels ill-advised without this type of mechanism in place, as it is increasing the % of osmo incentives being allocated for incentive matching, without improving upon any of the core problems currently present in the external matching system. Right now, it is bad that there is no accounting for bias factors, thus over-paying for non-osmo base pair pools, and it is bad that a few high external incentive pools take the entire matching pot. There should instead be per-asset / per-pool caps, as there is 0 obligation for 1-1 matching as the ratio. It is also significant that prop 127 a significant 50% increase, without much discussion, put up in haste. And without the community being very clear that its going to lower APYs to every other pool, e.g. osmo/atom, osmo/ust, osmo/luna, with the difference being giving atom/huahua 300% instead of 210% osmo APY. In defense of proposal 127, this was done, due to the 20% cap for external incentive matching being made without a clear guideline for how it'll be enforced being agreed upon. (As it was not specified in prop 47)\n\nAs a response, this proposal is also put up in haste, to try to fix some of the core problems in a way that the commonwealth, Osmosis discord, and Osmosis siberia comunities have already expressed agreement in. Namely, make external incentive matching follow the same bias factor present in Osmosis. This concretely means that the Osmo-side bonus APY for external incentive ATOM pools will halve. However, the swap fee APY, swap-fee induced osmo APY, plus the actual external incentive APY will remain as before. This a better allocation for incentives that governance has already agreed upon, and it was inconsistent that this was not already being done for external incentive matching.

Votes

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Proposal #128: Add a bias factor to external incentive matching - Osmosis (OSMO) Mainnet Explorer