Basic farming report based exclusively on my own farming within the following pairs.
AGVE-xDAI
HNY-xDAI
xCOMB-xDAI
LINK-xDAI
STAKE-xDAI
Lets start with the basics.
First the launch so far (knock on wood) appears to have gone without any hitches.
A few things worked very well.
- The airdrop to LP providers based on historical LP provisions
- The 10% immediate and 6 month vesting schedule
- The rather high return on the xCOMB-xDAI pair holding price up nicely.
- xCOMB-xDAI LP and price discovery worked well.
Now looking at opportunities at the time of writing.
USDC-xDAI 45.66 .18% 67.32%
AGVE-xDAI 228.32 1.97% 719.39%
LINK-xDAI 91.33 1.45% 529.99%
STAKE-xDAI 91.33 .54% 195.60%
HNY-xDAI 228.32 1.18% 429.61%
AGVE-HNY 136.99 .76 276.09%
wETH-xDAI 91.33 .89% 323.68%
wETH-HNY 136.99 1.46 532.51%
xCOMB-xDAI 913.27 6.55 2392.03%
wETH-wBTC 91.33 .69 252.18
So what happened to liquidity
Total Honeyswap liquidity basically doubled from 7.5M to almost 16M now.
Price increase from 450 to 600 on HNY increases liquidity about 500K out of 1.3M (800K additional)
Price increase from 300 to 420 on AGVE similar increases to HNY
Pure liquidity addition on xCOMB-xDAI now about 1M
wETH liquidity almost doubled while price dropped so most of our liquidity came on the wETH side with it dominated byt the wETH-xDAI pair. up about 800K
AGVE liquidity dominated by AGVE-xDAI pair almost 800K there.
some wBTC-wETH came over as well bumping liquidity perhaps 600K in that pair here.
STAKE-xDAI liquidity up about 800K as well.
In the loosest sense liquidity is up probably 4-5M due to new money (3-4M xDAI pairs .8M wBTC-wETH). The rest of the liquidity increase 2-3M is due to price appreciation of HNY and AGVE.
We now have 1000K xCOMB-xDAI liquidity which is great.
7129xCOMB/536039wxDAI should provide decent price support particularly if we reduce drip (see recommendations below)
Returns are such that liquidity is driving into the key pairs in this order.
xCOMB-xDAI then
AGVE-xDAI
LINK-xDAI (not so attractive for some reason)
HNY-xDAI
wETH-xDAI seemed pretty attractive to people.
Based on above I would encourage the following changes to rewards.
USDC-xDAI 45.66 .18% 67.32%
AGVE-xDAI 228.32 1.97% 719.39%
LINK-xDAI 91.33 1.45% 529.99%
STAKE-xDAI 91.33 .54% 195.60%
HNY-xDAI 228.32 1.18% 429.61%
AGVE-HNY 136.99 .76 276.09%
wETH-xDAI 91.33 .89% 323.68%
wETH-HNY 136.99 1.46 532.51%
xCOMB-xDAI 913.27 6.55 2392.03%
wETH-wBTC 91.33 .69 252.18
Total 2054.87
USDC-xDAI 90 .35 132.70
AGVE-xDAI 140 1.208 440.90
LINK-xDAI 90 same ~520
STAKE-xDAI 90 same ~190
HNY-xDAI 180 .93 339.54
AGVE-HNY 90 same ~270
wETH-xDAI 90 same ~323
wETH-HNY 90 ~1 ~350
xCOMB-xDAI 300 2.1516 ~785
wETH-wBTC 90 same ~252
Total 1250 -804.87 down 39%
Key points here. Rewards look pretty decent. Overall returns in the 1%/day range are generally quite good and highly competitive. Since xCOMB price determines this we want to be quite careful with how we manage incentives on the xCOMB pair and to do everything possible to reduce the total drip while maintaining sufficient rewards incentive to manage xCOMB price.
Put simply we want the good times on xCOMB to be able to last as long as possible. To this end I believe we can reduce total xCOMB outlays by 40% while still providing appropriate rewards for the next 2-4 weeks at least. Should we find xCOMB price dropping this gives us the ability to more than double those xCOMB rewards to try to provide some LP and price support.
Reducing the xCOMB drip here should help give us some idea of whether the market price of xCOMB is purely dominated by farming drip, or whether there is a price perception here. My expectation of dropping the xCOMB drip by 40% would mean a xCOMB price more in the 100 range, but with less rewards one might expect less to be put into the xCOMB-xDAI LP. Frankly I am farming more than 1/2 of these and I am taking my xCOMB to 1/2 cash and pairing it with xCOMB to compound the returns for a while as the returns are just too compelling.
At 5%/day returns there I see no reason for anyone to take LP anywhere else. This is why I think we can reduce this to 300 to give a 2%/day return (still very good) and still better than any other pairs. This should still drive liquidity into that LP while maintaining decent price support and lowering drip by 800 xCOMB/day.
The above is my recommendations for LP xCOMB farming returns.
As a last note I upped USDC-LP farming rewards by 2x because I think that is generally an important pair. The pairs I am not as interested in are the AGVE-HNY, wETH-HNY and over time would like to see those depreciated mostly to allow liquidity to pool back together in xDAI than to stay fragmented. If we have strong Token-xDAI LPs these will provide great liquidity and price support and then if people want to go to wETH they can pass through a well supported wETH-xDAI pair.
I think we should start thinking more about how people get to USDC and this is where the xDAI-USDC pair comes in (I keep thinking curve fork btw on stablecoin trading). Some thought of putting LP farming incentives doing the wETH-USDC pair may be another good way to pass through wETH to get to USDC/xDAI but I am mixed on the stablecoin focus here. I just know we should be as friendly to USDC as xDAI here if possible.