RFC: Proposed Tulip Swarm Roadmap

🍯 Honey
#1

The following is a tentative roadmap for the Tulip swarm, focused primarily on improving Honeyswap and the liquidity fracturing happening across Layer 2.

Sustainable Farming

We stopped farming because we found that the way we had implemented farming (on a more ad-hoc basis via proposals) wasn’t as effective as we had hoped. We collected data and analyzed the situation, and determined they just weren’t working well enough to justify the immediate sell pressure on the Honey token.

However, we understand how important bootstrapping liquidity is, and how important the contributions of early and loyal LPs on the platform are and so we have been working on a plan to bring Sustainable and Safe Farming to Honeyswap.

Here’s the plan:

  1. Issue a new fixed supply token “HSF-xDai”. We can do a retroactive airdrop to honeyswap users and LPs, for a portion of the distribution to reward early adopters.
  2. Distribute HSF-xDai via farming to eligible honeyswap pools. Pool eligibility can be determined via a multisig initially and then moderated using Celeste. The contract would be written such that a percentage of the balance of HSF-xDai is distributed each epoch.
  3. Replace “Honey Maker” contract with a new contract, which would convert fees and split proceed into HNY and HSF-xdai. A function would allow setting the ratio, but the HSF-xdai portion must be greater than 50%
  4. Send HNY to the common pool as we do currently. Burn 50% of the HSF-xDai, and recycle the remainder of the HSF-xDai back into the farm.

The result is a system where early LPs get a large advantage by earning HSF-tokens when there are fewer LPs on the platform, These tokens are valueable because they represent a claim on future cashflows, while also ensuring that there is a continuous supply of HSF-xdai circulating through the farm protocol.

The farm is also designed to be safe. Unlike other farming contracts there is no way for our farm to do anything to the deposited LPs (no migration), and there are no deposits or withdrawal fees, and all parameters of the deployment are fixed without governance control.

The HSF-xDai token can be valued with a discounted future cashflow model, with 0 locks ups, and no ponzi-inspired deposit or withdrawal games. Just simple, no BS rewards for LPs.

1hive can use its discretion to modulate the share of fees given to LPs, but can never go below 50%. This enables 1hive to increase rewards as needed to compete with any potential incumbents, while providing strong assurances about the minimum expected value of the HSF-xDai token. This discretion is delegated to the Tulip swarm, allowing the use of snapshot signaling to engage with current LPs and HSF-xDai holders when adjusting this parameter.

Honeyswap Liquidity Network

TLDR now that we have bridged Honey over the Omnibridge to Ethereum and from Ethereum to Matic, we are going to deploy on Honeyswap on Matic.

This new instance will have a corresponding farming token HSF-matic, as well as half price swaps on any Honey Pairs, helping to ensure there is a focal point for liquidity which will minimizing multi-hop trade fees, also because Honey is money.

Users will be able to come to honeyswap and connect from any supported network and interact with the local version of Honeyswap.

Overtime as new EVM compatible networks and rollups emerge we can extend the Honeyswap Liquidity network there, too.

Cross-dex and Cross-chain Liquidity Aggregation

We are working with connext to establish the first state channel based market maker.

This will allow us to create Honey Liquidity Channels that connect instances of Honeyswap deposed on different chains, allow more efficient cross-chain market making and reduce the spread between

This will ultimately enable users of Honeyswap to source liquidity from multiple sources on multiple different chains or L2 rollups.

Honeycomb Wallet

Inspired by Zapper, Zerion, aggregation at the interface level is likely how most mainstream users will experience defi protocols.

We also recognize the terrible experience metamask has become on xDai, and want to offer a better experience interacting with 1Hive’s projects.

Honeycomb will be a dapp interface that can be accessed via frame (desktop) or wallet connect (mobile).

It will provide a portfolio view and the ability to make simple token sends and deposit/withdraw fiat using ramp (eu) and wyre (us).

It will allow users to compare returns and enter positions across Agave and Honeyswap (including staking LPs in farms)

AMM Research

Collab with Luna, to work on a next generation AMM system. Reviewing recent work including balancer v2, curve, futureswap

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xBalancer proposal
1Hive Monthly Recap - February 9th to March 21
HoneySuper — Incentivizing the provision of Honey (HNY) liquidity on Honeyswap
#2

Love seeing all the plans coming together. 1Hive’s ability to improve and implement is second to none. I am very excited for everyone’s future here.

#3

HSF-xDai sounds great, exactly the thing needed. But how will be determined what LP pairs get how much HSF-xDai? Someone could create a couple of new coins, make LP pairs and drain the HSF-xDai without being usefull to the eco system

#4

This is all exciting news.
I’m looking forward to farming my LP tokens.
The Honeycomb wallet sounds great, I can agree there are many difficulties in dealing with metamask. Will the Honeycomb wallet allow direct purchase of xDai and/or purchases of tokens on xDai chain? Or will it still need to be run through Mainnet? Also does anyone know from experience if Wyre requires KYC?
Also what is the time frame that would be considered an “early adopter”?

#5

You had me here. I love this.

#6

The token would be distributed to Liquidity Providers in eligible farms, this curation is required for exactly the reason you’ve identified, not all LPs provide value and its also possible to create LPs that appear to have a lot of USD despite very little real liquidity being added.

Initially, to make sure we can get things up and running as quickly as possible, and to ensure we have a good coverage of initial LPs, we would probably rely on a multisig + delay to set the pool eligibility and reward weight, and rely on Snapshot to allow Honey Holders and HSF-xDai holders both to signal which pools should be incentivized.

This is a bit further out compared to some of the other initiatives so things may change, but I think it would make sense to at least support Ramp, which we have already integrated into the Honeyswap landing page. I would love to also support Wyre since they service the US and Ramp does not, but it will depend on if they add support for xDai in time.

As far as I know all of the fiat onramps will require KYC of some sort, I think the best way to onramp if you don’t want to KYC is to use one of the xdai faucets, and start contributing to 1hive and earning Honey through Pollen or Proposals :smiley:

I think a really important decision we will make before launching the HSF-xDai token is what the supply will be, and what the emission curve looks like. None of this has been determined yet, but we would definitely want to do it so that emissions are larger initially and become smaller over time, this way the LPs which are participating early on while we are in the bootstrapping phase are properly rewarded.

I also think it would make sense to include LPs proportional to the liquidity they provided in a retrospective airdrop, but Im not sure about including users who have traded on the exchange as I would be worried people would just create bots to trade a bunch from different accounts to try and maximize their rewards without actually adding real value, perhaps if we looked at the value of the trades or something it would be sybil resistant.

2 Likes
#7

Ok the important questions.

Wen airdrop, Wen farm, and wen moon?

Let’s go!

7 Likes
#8

Hey Luke let’s make it more competitive and lucrative like this,everyone should be able to get initial conditional airdrop, if provided Liquidity at the time of the official HSF announcement till the launch will get initial airdrop of some minimal HSF .

Everyone should get same chance to provide Liquidity and boost his initial aidrop ,this can bring more LPs.

The formula would be :
Total airdrop for everyone that will provide LP = Initial airdrop amount 100 HSF conditional if they provide and keep Liquidity * LP value in $$$ (average from all days and qualified pairs from the announcement date till official launch * days providing liquidity / 10000 coeficient

The airdrop example for LP that provided 5000$ worth of liquidity would look like this :

100 HSF conditional airdrop * 5000 $ (average LP in $) * 10 days of Liquidity locked / 10000 = 500 HSF when farming launch.

500 HSF they would get from the airdrop pool /airdrop pool should not be huge maybe 10% of total HSF tokens max.

or maybe instead we should make a square root on the airdrop like this:
Square root of 100 * 5000 * 10 which would give 2.236 HSF

The idea is to give same chance to everyone to bring their Liquidity,it doesn’t matter if it’s new or old Liquidity provider, we need to attract more Liquidity providers.
I think this will get everyone chance to get involved as LP on Honeyswap and keep the LPs around for longer time because they will get more HSF if they keep the liquidity when farming starts, but would like to give everyone fair chance to start providing liquidity and thus we will grow overall Honeyswap liquidity.

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#9

Yeah I like that, I think we would probably want to allocate a certain percentage of the initial supply to the airdrop, then for liquidity (which is inherently sybil resistant) we can do the airdrop based on dollar value of liquidity over the period of time between say the beginning of February (giving some advantage to LPs before the announcement) and the launch of the farms. It would effectively allow the farming incentives to start immediately, and then be fully automated when the actual farming contracts launch.

3 Likes
#10

Muy buena informaciĂłn gracias. Esperemos que todo siga avanzando. Esperando mucho de 1hive

#11

This is huge and exciting not what all the dexes are doing today especially cross chain market making will be game changer. And combined liquidity will be huge

#12

I think it’s important that liquidity providers are awarded from the start to encourage further interest.

Potential idea:
Liquidity provider tier system gamification: the longer you stake and the larger amounts you stake, you get rewarded with ‘points’, not in relation to farming awards, but virtual points that have no monetary value. The points indicate the tier of that liquidity provider, for example: platinum (requires 1000 points), gold (800 points)…etc.
These tiers can be further rewarded, either by increased APR , other other platform benefits, they could also be non monetary as well. I think there could be multiple ideas here.

We could also do competitions for these points, like daily, weekly, monthly, yearly. With the top supporters being rewarded.

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#13

These are fantastic ideas. Given the near universal gas pains, honeyswap expansion would be welcomed. How can I help?

#14

Depends on what your skills are, if your on the discord feel free hop on the tulip swarm channel and introduce yourself, we also recently created a smaller discord just for the tulip swarm contributors so we could spread out work related discussions into several channels.

#15

Awesome to hear about this roadmap, big fan :slight_smile:

One thing I would like clarified regarding sustainable farming.

  1. Issue a new fixed supply token “HSF-xDai”. We can do a retroactive airdrop to honeyswap users and LPs, for a portion of the distribution to reward early adopters.
  1. Distribute HSF-xDai via farming to eligible honeyswap pools. Pool eligibility can be determined via a multisig initially and then moderated using Celeste. The contract would be written such that a percentage of the balance of HSF-xDai is distributed each epoch.

Would the retroactive airdrop be to all honeyswap users/LP holders, or only to ones who used the eligible pools from point 2?

#16

After digesting this overnight, I wanted to bring a suggestion to the Honeycomb Wallet.

I want to see a Smart Wallet on Honeycomb, similar to Instadapp. If you go to InstaDapp on Ethereum, you’ll see you have to create a “Smart Wallet” that you can control via your actual Ethereum wallet. From this Smart Wallet in the UI you can “trade” (Honeyswap) or deposit from your Smart Wallet balance into various DeFi Apps (there they have MakerDAO, Compound Finanec, AAVE and Curve available).

What’s cool about it though, is from the Smart Wallets contracts perspective, you command what it does by giving it a series of transactions you want issued. You can chain multiple commands into 1 transaction. This allows for UI buttons like “Refinance” that lets you move your collateral/debt from one defi to another in one transaction, despite the fact that under the hood, it does it in multiple.

It’s actually kinda game changer and as InstaDapp my most used DApp on Ethereum. You could make a UI button where you take “Dai on Binance on xDai” and chain it through the smart contracts needed to unwrap it to regular xDai as one button press in the wallet, rather than having the users know about the two websites needed to do the same thing in two transactions. You can make a “Rebalance Pool” button on the Honeyswap Pools section of the wallet where you tell it what tokens you have and it withdraws/redeposits the LP tokens you have in a such a way that rebalances in one transaction, even though under the hood that alone would be 2-4 per LP token manually.

It also is future proofing for future defi’s. If a team comes out with a Compound Finance equivalent or a MakerDAO equivalent, the Smart Wallet can talk to these new contracts just as easily, and making the Honeycomb Wallet open source would allow for people like me to contribute and add buttons we want to see.

#17

@Carson I have been thinking along similar lines, I think its a great idea!

One of the things we can do with Honeycomb Wallet is try and make the onboarding and interaction experience of using L2 really good, and using a “smart wallet” architecture offers a ton of possibilities to abstract interaction patterns when dealing with things that may span multiple networks/rollups without the user having to care about all the details of what’s happening under the hood, it also allows for meta-transactions for arbitrary interactions allowing us to abstract gas management a bit and bundling of more complex compound transactions into a single signature, as well as key recovery schemes that may be more friendly for users new to the blockchain ecosystem.

I think it makes sense from a development perspective to carefully consider smart wallet integration and work towards iteratively though, it has a ton of advantages but also brings up quite a bit of new challenges, and I think we can get some quick wins first by creating a single interface that you can use to interact with Honeyswap (including liquidity aggregation routing), Agave, and the new farming system from an EOA.

I still need to work on a longer status update on these roadmap items, we are making lots of progress already, but will go ahead and share the following now since its relevant…

We have an initial prototype of Honeycomb Wallet in Figma (thanks to the amazing @borisblock!) we plan to start implementing. We are prioritizing the sustainable farming milestone so we can get that up and running on xDai ASAP, so initially that may be the only tab that is fully available.

We are also working in parallel on the Honeyswap deployment for Matic, the cross-chain swaps using connext channels, and how we will integrate all that into a single interface, so will have a more formal process update from the swarm soon.

2 Likes
#18

Awesome to hear, that sounds very promising. I agree with getting a MVP out ASAP, a clean wallet interface alone would bring a lot of value to xDai. I’m happy to hear that on the long term your team is looking at a “smart wallet” architecture

Cross-chain swapping is something I never really though about… but that’s a super cool idea. I’m excited to see it in action.

The Honeycomb Wallet prototype looks pretty cool! Definitely on the right track. I’ll keep an eye out from the swarms future update :slight_smile:

#19

Brilliant work you have done here at 1HIve, these features you have listed above are all incredibly valuable to the network, well being and survival of L2 chains especially xDAI.

Are there any plans for NFT integration for the Honeycomb wallet on xDAI?

#20

Seems I had a drafted comment that I never posted:

Amazing write-up and congratulations @lkngtn and Tulip Swarm! These are incredible developments and I am so excited to be a part of this community. The fact that users will be able to access Honeyswap from multiple networks using the same wallet is such a simple yet useful idea that I am shocked no other mainstream DEXs have integrated such a feature.

Quick question: When it comes to cross-chain integration, will HNY be chain-agnostic, remain mainly on xDai, or be deployed in a wrapped form on multiple networks to improve cross-chain interoperability?

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