Requesting Matching AGVE Rewards to Incentivize Agave Protocol

🌱 Ideas
#1

On September 30th the proposal to add $500k in $STAKE rewards to the Agave protocol passed. You can read more here.

There were 2 parts of this agreement:

  1. matching the rewards with $500k in AGVE and
  2. add the $STAKE token to the Agave protocol and to be used for collateral.

This proposal is requesting the support of adding $500k in AGVE incentives paid out over 1 year period distributed amongst depositors, borrowers, and stakers (staking incentives will be included in a separate proposal). The majority of these incentives will go towards Depositors and a much smaller percentage to Borrowers. As a reference Aave currently uses a 10x to depositors to 1x to borrowers. I would propose a slight increase to the borrowers but not by much maybe an 8:1

The actual amount request is only for 1 month $500k / 12mo / $170/AGVE = 245AGVE - 45 set aside for staking = 200 AGVE.

Please see the link above for the details on the KPI metrics. The first month is intended to bootstrap the protocol so TVL >$0 will payout 100% and $STAKE token market cap >$0 will payout 100%.

Add 200 $AGVE incentives for 1 month?
  • Yes
  • No

0 voters

This proposal was written quickly, I look forward to hearing from the community

Shout out for @Stonky @luigy help with this

8 Likes
#2

Same here can’t wait

1 Like
#3

I think 200 agave is too much for the first month. It is targeting for an increase in liquidity from 100k into the +20M TVL which if it doesn’t happen will pretty much imply we overpaid for the liquidity that came. I would be more comfortable going with a smaller amount like 50 or 100 agave just to test the waters and then with the KPI tokens we can actually go bigger with a more clear perspective of what to expect.

4 Likes
#4

I think few people in our community have the technical knowledge and experience to judge the KPI metrics or how to start, especially with the first month being…the first month.

I’m a bit afraid about stake going up in price, as it has not been moving in ages, but I would be happy to be wrong on this one.

I think to speak for large part of the community saying that I’m ok with 200 $Agve, but if we want to adopt a safer perspective and go with 100 that would work too. I don’t expect much further discussion, not for low interest but mostly because you guys are probably the most trusted in the whole community and definitely with more experience than many others.

2 Likes
#5

Most lending protocols see a 10%-3% APY.

200AGVE x 2 x $170 x 12mo = $816k/yr / (3%-10%)

so we should see somewhere between $8M - $27M which is a very wide range. Maybe a tighter estimate would be 6-8% or $10M - $14M

If we go below 200 I wouldn’t go too much lower maybe 150AGVE at the most to ensure we reach above $10M by EOM.

2 Likes
#6

Make sense for max increase protocol revenue given the capital that will be attracted with farming incentives. Where can i find docs with CR and other metrics for Agave protocol?

#7

What type of metrics would you be interested in?
And by CR do you mean the amount of borrows in the protocol or do you mean in accounting terms of the DAO.

To be absolutely honest I’m not sure what would be the right way to account DR and CR in our case since it’s a peer to peer lending market it becomes harder to differentiate when compared to a traditional bank.

If you mean CR as in minimum collateral ratio it depends on the asset and since we are a fork of aave we decided to keep their terminology than change it into the one that Maker uses. LTV is pretty much your collateral divided by the loan you take. So if it’s 70% it’s pretty much the same as CR of 1.42 I suppose. More important is to keep track of the Health Factor. But you can find this information on the site when you click the tiny orange information buttons.

1 Like
#8

I have been using Compound for the last 3 years, but I transferred part of the funds to Aave after Polygon integration. I currently have active management at several addresses (aave - instadapp) and would like to switch 1 account from polygon (aave) to xDai (Agave). Given the different structure of supported tokens, it would be good to calculate the migration risk and plan the structure of lending and borrowing side.
If the collateral ratio for assets and protection system (cushion) is the same as for Aave (~ 1 - 5%) it will make my procedure easier.
Tnx for info, i will check docs

1 Like
#9

Please come to the discord https://discord.gg/agave and maybe on Tuesday I will be able to have a voice chat with you and help you out in that migration and we can breakdown those numbers together. Currently our documentation is quite poor/negligible to be honest and I feel like you can help me out with identifying all the relevant information that an investor will be interested in knowing when considering that migration.
So yeah I would really like to talk with you.

2 Likes
#10

sure, that will be great. I tried move funds to xDai chain before 6 months because stable gas fee model and higher governance quality, but I didnt find enough liquidity. I’m glad things started up

1 Like
#11

I might be able to help with documentation if you don’t have that covered.

1 Like