Staking & Farming Allocations Distribution

According to Intro we have 33% GTON tokens allocated for LP farming and governance staking.

Here is a description of how this could be implemented. Let’s discuss and vote ACCEPT/REJECT. REJECT means that we have to think more about numbers based on community & advisors feedback.

Configuration:

  1. 4 years (95%) vesting (unlock): the same unlocking curve as EB, only two times slower

  2. Globally, this allocation contains four categories: staking, LP-GTON-USD, LP-GTON-NT, LP-GTON-WT (NT - native tokens, USD - stablecoins, WT - wrapped assets)

  3. Out of the 33% of GTON, the allocations are distributed for:

  4. GTON Staking: 30%

  5. LP-GTON-USD: 35%

  6. LP-GTON-NT: 15%

  7. LP-GTON-WT: 20%

  8. The distribution of weights by blockchains is defined as the natural logarithm of their market cap.

  9. Stablecoins that are included in the GTON-USD allocation:

USDT, USDC, fUSDT, BUSD, HUSD

The weights for stablecoins are defined as the natural logarithm of their market cap.

  1. In the Graviton Catalyst program, 20 projects are involved simultaneously in a batch, and for each project a 1% allocation is designated. Every two weeks, projects should be rotated (put on hold for 2 weeks, after which reactivation by voting is possible), that is, the next project in the top 20 is determined from the overall rating by voting.
  2. The commissions that the project will generate from any products and services will be distributed among all 4 allocations in the same proportion as the pharming / unlock token.

Rationale

  • The reasoning behind such distribution weights is based on the principle “the larger the cap, the more reliable it is”, and the strong imbalance between the caps is smoothed out by the logarithm.
  • The logic of allocations is according to the following principles: it is important for stakers to receive a reward for the purchase and locking of GTONs and participate in voting (the active stakers will farm 30% more than passive stakers; to receive the “active” status, you should participate in more than 4 votes per month).
  • GTON-USD has a higher reward due to an impermanent loss, which is being offset by an increased profitability.
  • GTON-USD has a higher allocation than NT and WT because we try to decouple the token’s volatility from the market trends
  • GTON-WT is larger than GTON-NT because by voting for a WT, the community identifies projects with a great growth potential which will drive demand for GTON. Hence, the liquidity of the wrapped assets through the GTON “proxy” is the key task of the project at the first stage.

P.S.: EB & SPI locked allocations will be included in Staking “by default”

8 Likes

This seems reasonable to me. My only concern would be that the lower % for LP-NT and -WT compared to staking might disincentivize LPs and create more interest for staking. Not necessarily a bad thing to have more staking though :slight_smile:

6 Likes

Staking generally don’t have much meaning to early-stage projects other than reliefing short-term selling pressure, which is not that important for long-term project like us. Maybe considering delay the start of staking or reduce the allocation for staking or add some constraint such as locking for stacking is better.

4 Likes

Lower the staking and add some more to Pools with Wrapped Tokens as this is what its all about :smiley:

3 Likes

@chainlife I assume the larger part of people will be staking so the share of graviton allocated to investments of LP (per dollar) will be larger anyways. Given the difference in liquidity of both groups I wouldn’t lower this pool at all.

@alexp I propose a scheme to boost the reward for liquidity providers (staking/pairs) that lock their assets for a given amount of time. This is interesting to deincentivise from day trading and improves the stability of the token. A more stable coin would also reduce the cost incurred by arbitrage done by Pathway, as less dips and heights will occur.

I can think of two implementations:

  • The reward goes up as the asset has been present in the pool for a longer time. This would involve more work to find a proper formula that doesn’t explode too much for larger times. Practically, everybody will be ‘by default’ included to the boosted reward as it doesn’t require any extra involvement from the liquidity holders.
  • The user decides on the locking time beforehand, after which a boost is given from the start which is constant. Unlike the previous implementation, liquidity providers wouldn’t be able to retract their assets at all. Additionally, as this choice requires an action from liquidity providers (and some premeditation on the optimal locking period), not as many users will be included to this. As locking away assets has a higher effect on the liquidity providers, I would imagine the second implementation to have a higher reward.

Overall, I think this idea falls in line with the goal of the graviton dev team to push graviton forward as a stable investment.

3 Likes

Reward lockers for a certain period of time.
It’s a good idea, but in that case, what happens if you use UNI and it goes out of the specified price range?
will be a problem

“specified price range” - please, elaborate

1 Like

If Staking NT or WT to gain Gton, and vesting is the same EB. I think this phrase will be made the diversify for our LP.

Will it be better for GTON-USD to be lowered and allocate to WT and NT for better partnerships?

I wonder whether the 20% allocation for LP_GTON-WT is enough. Isn’t this the core of the Catalyst program?

Isn’t LP-WT-USD eligible for LP farming?

Where is USDN in the GTON-USD allocation?

it was swaped to usdc/eth/bnb/ftm/fusdt/matic to provide AMM liquidity across all chains.
you can check liquidity/amms/volumes stats here:

Based on Forum’s discussions and escpecially Jim 's proposals/comments. There is an idea:

what if we’ll use amount of locked GTONs as a weight for farmign disctribution for both staking & LP farming

imagine today according to “exponetial decay” formula for Staking & Farming allocation we have undestributed 10k GTONs

atm we have: 100к GTON in staking, 50к GTON in NT-LP, 30k GTON in WT-LP, 200к GTON in USD-LP

which means we’re distributing those 10к GTONs across 4 pools:

total GTONs locked atm = 100 + 50 + 30 + 200 = 380k in the system

so we’ll distribute:

into staking: (100/380)*10 = 2.6k (26% weight)
into NT LP: (50/380)*10 = 1.3k (13% weight)

and so on.

Pros:

this system is fair and autobalanced
imagine we have a LP-pool with weak asset

so if the price of this asset will decline
amount of GTON will be decreased in the pool => less GTON farming rewards for it

also

stronger assets will bring more GTON for it’s holders as a compensation for possible impermanent loss if an asset is outperforming GTON for some reason, this will motivate more people to move liquidity into asset/gton and this will organically push gton price as well

so, it seem like this is self regulated approach to farming rewards distribution

I called it: Reflection

1 Like

Interesting approach Alex. One thing that might have some unintended consequences however:

If we use the amount of GTON in each pool, the APR will always be double for staking - as there is no additional token with the same value included. This might lead to many staking and not LPing - which would then result in lower LP liquidity - which is not the target.

So if we go this path, I would suggest that we add weights to the pools, which would essentially change the APR relative to each other to an intended ratio.

So lets say the intended ratio for a LP GTON-Wrapped Token pool is three and for staking it is 1. This should result in an APR for the LP GTON-Wrapped Token pool to always have a 50% higher APR than GTON staking.

Check:
Assuming GTON price is 10 USD and the Wrapped token price is 2 USD or 0.2 GTON. We have only this pool and the staking pool. In the staking are 100k GTON, in the Wrapped Token pool are 50k GTON. The TVL of both pools is thus 100k GTON or 500k USD.
With the assumed factor of 3 the Wrapped Token pool will be caluclated as 150k GTON, while the staking pool with factor 1 as 100k GTON.
Staying in Alex’s example, to 10k GTON would be alloacted 150k/250k to the Wrapped Token pool, which equals 6k GTON. The other 4k would go to the staking Pool.

From my understanding on the whole matter of APR (a more detailed post here), reweighing pool rewards will mostly affect liquidity in that pool.

That said, reweighing the pools based on the asset strength might be a bad idea, and will incentivise liquidity migration based on the current market.


Example:
I’ve invested in GTON-ETH (500$, APR 50%), ETH price dropping will cause two things

  • reduced APR: my share in the pool is equal, the APR is therefore not influenced by the weak asset. However, by reweighing the GTON allocation the APR lowers
  • impermanent loss: impermanent loss occurs if either asset grows/weakens with respect to the other

The effect results not only in my liquidity being worth less (ETH price dropping), but also results in lower reward (GTON allocation dropping). Moreover, other pools suddenly enjoy better APR rewards. More people will migrate liquidity to other pools as compared to a system where the APR stays the same.

For the project, I would project this system to make liquidity present in each pool less stable and more correlated to the shifts of the market.


this system is fair and autobalanced

What constitutes fair? The balancing causes the feel of double lose to liquidity providers (see example).

stronger assets will bring more GTON for it’s holders as a compensation for possible impermanent loss

Impermanent loss applies to both assets growing stronger and weaker

this will motivate more people to move liquidity into asset/gton and this will organically push gton price as well

I’d like to see a more expanded step-by-step explanation on this happening.

1 Like

The above is pros

Here is cons

“so if the price of this asset will decline
amount of GTON will be decreased in the pool => less GTON farming rewards for it”

joke a bit. Fun, it really fun. if Gton more values, reward will be increase. If down, the reward will be maintained. it is really nice.

Might, the pathway is perfect so far. I hope it is also the best when “reflection” with market in further.

In the distribution of gton-usd, should some other stable currency types be added to make it more diversified?

This makes a bit of sense to me. I’m worried that it will end up in the negative ways of Swop,fi, ie, finding adoption and keeping APYs high will be difficult in the long run. If you look at Waves Ducks, it is the same thing. They purposely bring on new proposals or ideas for how to make the ducks worth more, they can be perched, they can farm, they can be bred… the least disirable most common ducks suddenly stop being born… they will run out of things eventually, or transform the game somehow. Graviton needs to keep a close eye on keeping APYs high for adoption as there are some other cross chain solutions coming out there. The pool weight voting or some kind of other incentive will help as long as it doesn’t get too diluted.

Swop’s biggest problem is that it was built on Waves. Since years almost none wants to build something on Waves. I don’t know if it is the programming language or something else.

Sasha’s promises are either done too late or not at all. Starting as Dex and ending as centralized Dex, mass adoption with big companies which he was telling in 2019…

Even Aleksei has swapped early birds USDN to other stablecoins. (Of course he should if it is the best for Gton)

I agree that we need something besides interest like income until Gton is widely used as cross chain aggregator.