External Incentive Matching reduction within non-OSMO categories
passed
Expected result
Passed
Turnout / Quorum
42.63% / 20.00%
Voting period
Voting ended100.0%
Voting start 2022.06.23 at 17:10:37
Voting end 2022.06.28 at 17:10:37
Vote distribution
97.41%
86 087 362 osmo
Yes
0.47%
417 584 osmo
No
0.01%
6 003 osmo
Veto
2.12%
1 869 605 osmo
Abstain
Details
Proposer
-
Total deposit
500 osmo
Submit time
2022.06.23 at 17:08:07
Deposit end time
2022.07.07 at 17:08:07
Description
- Voting YES for this proposal indicates that incentive categories not containing OSMO as a component should have external incentive matching capped as follows.\n * Reduction in the efficacy of fees used to allocate the share of OSMO incentives used for matching external incentives to 33%\n * Capping the value of OSMO used to match external incentives at 0.5:1\n\n* Voting NO for this proposal indicates that all incentive categories will continue to be matched at a maximum 1:1 value ratio\n\nExample: https://commonwealth-uploads.s3.us-east-2.amazonaws.com/1413b2b3-9d38-4865-8717-ba9a8ba4d0e7.1655974330412 \nAs an example of the proposed model, both FOO/OSMO and FOO/ATOM pools generate 30k per day in swap fees and have 15k provided in external incentives. Currently Osmosis will match all 15k of these external incentives in both pools. The line that reads 'Capping the value of OSMO used to match external incentives at 0.5:1' causes the FOO/ATOM pools to have 7.5k spent on matching compared to 15k on FOO/OSMO pools.\n This is further limited if the fees generated are lower. In a scenario where both pools generate 5k per day in swap fees, currently, 5k of the 15k external incentives would be matched in both pools. The line that reads 'Reduction in the efficacy of fees used to allocate the share of OSMO incentives used for matching external incentives to 33%' causes this 5k to be reduced to 1667 in matching on the FOO/ATOM pool.\ni.e. to achieve full matching the pool would need to generate 45k in swap fees.\nN.B. Example is weightings of fee allocation rather than actual figures.\n\n### Background\nExternal Incentive matching was first established in Proposal 47 to incentivize their addition to Osmosis pools. This quickly grew into a major driver for incentive allocation following chains such as Stargaze, Chihuahua and Comdex adding large external incentives in comparison to the normal Osmosis incentive structure.\nIn order to preserve incentives for established projects, without external incentives but important for the growth of Osmosis as the IBC decentralised exchange, governance voted in Proposals 128 and 133 to implement a bias factor around how fees were used to calculate external incentive matching as well as a cap on matched Osmosis incentives relative to un-matched Osmosis incentives\nThe bias factor was defined as:\n\nThe 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\nAt the time, this was a requirement of equivalent of fees to be generated in a non-OSMO pool to provide the same matched incentives as equivalent of fees in an OSMO pool as well as capping the match at up to 50% of the external incentive value.\nProposal 233 reworked the incentive system to use a set of categories to allocate incentives to pools based on their component assets rather than a bias system and so there was no new preferential treatment system for the matching system to adapt to, causing all external incentives to be matched equally in all pools.\nThis proposal asks that the previous matching biases be re-established in the new category model by:\n* Reducing the efficacy of fees used to allocate the share of OSMO incentives used for matching external incentives to 33%\n* Capping the value of OSMO used to match external incentives at 0.5:1\n\nCategories affected:\n* Stable/Stable\n* Major/Stable\n* Other\n\nCommonwealth Thread: https://gov.osmosis.zone/discussion/5767-external-incentive-matching-reduction-within-nonosmo-categories
Votes
Voter
Answer