Proposal #592

Add ATOM/USDT pairings to the Osmosis Incentives Program

Exec Legacy Content
passed
Expected result
Passed
Turnout / Quorum
71.80% / 20.00%

Voting period

Voting ended100.0%
Voting start 2023.08.25 at 18:54:55
Voting end 2023.08.30 at 18:54:55

Vote distribution

96.95%
144 309 086 osmo
Yes
0.00%
7 302 osmo
No
0.06%
85 912 osmo
Veto
2.99%
4 450 247 osmo
Abstain

Details

logo
Proposer
-
Total deposit
1 600 osmo
Submit time
2023.08.25 at 15:10:57
Deposit end time
2023.09.08 at 15:10:57

Description

This proposal asks that the pools comprising the ATOM/USDT Supercharged pairings created in Proposal 579 be added to the Osmosis incentives program. \n\n## Background\nPools following the pattern of MAJOR/STABLE category have received no incentives since the category model was introduced in Proposal 233. The Osmosis community had previously chosen to minimize incentives to non-OSMO pools to prevent excessive value leakage. \n\nThe MAJOR/STABLE incentives category itself was removed in Proposal 389. This was driven by the multihop mechanism being implemented, which led to the most optimal routing for trades being via OSMO rather than a direct route. \n\n Proposal 530 proposed adding a Taker Fee of 0.15% to all swaps, including each hop, drastically reducing the impact of the multihop discount and making direct routes competitive again. \n\nWhen a taker fee is introduced in a future software upgrade, establishing non-OSMO pools increases the value capture of the protocol in non-OSMO assets. This has the potential to exceed the value of OSMO spent on incentivizing liquidity to cater to trading. Each OSMO of incentives currently generates around 0.4 OSMO in swap fee value. With Supercharged pools expected to increase the efficiency of fee generation significantly, each OSMO emitted to these pools as incentives may lead to a net positive gain for the protocol and increase the yield for stakers. \n\nThis proposal asks for a limited incentivization of these pools, capped to no more than 1% of OSMO incentives in total, at a 1:1 daily swap fee to daily OSMO spend only, similar to how the Stable/Stable category is currently structured. \n\nThis would limit the OSMO spend on the pool if the fee generation is lower than expected while preventing the category from taking a large portion of OSMO incentives in this trial period. \n\nThe two ATOM/USDT Supercharged pools created in Proposal 579 would then be added to the incentives system at the next routine incentives proposal as part of this category. \n\nBoth pools are added to the incentives system to allow the optimal spread factor to be used from the two options of 0.05% and 0.01%. The pools will therefore be incentivized based on their performance. As there is no bonding period for normal Supercharged liquidity, this should encourage the movement of liquidity between the two pools as required to provide optimal trading liquidity. This represents a movement towards the incentivization of pairs rather than pools. \n\n \n\nForum Thread: https://forum.osmosis.zone/t/add-atom-usdt-pairings-to-the-osmosis-incentives-program/208

Votes

Voter
Answer