Round 2: Proposal for Incentivizing New Farms

🌿 Proposals
#7

Was looking at the fees on Honeyswap we have around 600$ daily swap average fees out of which 500$ got to the LPs and 100$ are transferred back to Honey which is around 0.3 HNY per day at the current price and that is around 9 hny per month . In the same time Honeyswap is paying to LPs around 700 HNY monthly and instantly which can be dumped, this brings instant selling pressure. It would make sense to lower the HNY rewards of max 50-100 hny per month and HNY-XDAI pair is making sense here.

Delaying rewards :
Other thing to consider is delaying the rewards , for example 100 HNY are rewarded monthly for a certain pair lets say HNY-XDAI . Those rewards can be unlocked across next months on a delayed rate , you cant claim them instantly… You may claim only 10% per 30 days out of your farmed HNY pool.

This will bring things in balance and HNY price stabilization as from 100 hny rewarded monthly LPs can claim 10 HNY only for the curent month, which is around the same rate as Honeyswap is buying HNY from earned fees ¬9 HNY per month. The next month they could claim ¬20 and so on… but they will not be interested to dump so much because they are still having locked HNY for the next months.

As for the next farms if we decide to implement this i would start slowly :
-Honeyswap would make 50 HNY reward for HNY-XDAI
-would split the rest of the 50 HNY to the other pairs…

3 Likes
#8

@solarmkd your assuming 100% of farmed honey is getting dumped.

HNYs swap volume is relatively low and the price drop is linear. We should consider we currently are Supplying 720 hny to the market. If you cut that by 60% that is significant.

Until we have a better solution for distributing hny we still want farms to to maximize opportunity for accessibility while not crushing the price. I believe a 60% decrease in farming rewards is all that is needed (based on post above) to stop the price fall AND provide the maximum distribution of hny through farming

#9

Having small experimental values for pairs such as HNY/xMoon would be interesting. Say, 5 HNY. It would also serve as a form of marketing; users from reddit coming over to try it out, and potentially falling in love with 1Hive, and the community. Sort of similar to how some users had the intention of just claiming from the faucet, but ended up staying.

2 Likes
#10

YEP
I back and contributed to this proposal

1 Like
#11

Yay to the updated version. I back and contributed to this proposal.

1 Like
#12

As promised:

My Support for 2nd Round Farm Proposal

I began making my voice increasingly more public about abstaining all farm proposals on 11/04/2020. I would have began earlier if I knew how abstained. Now I am supporting this farm proposal. This is my explanation as to why.

For the numbers people out there, we only have 6 farming pairs for data points. There is no way to make a purely predictive analysis with 6 data points on an equation that has well over a dozen variables from the price of ETH to the reliability of the xdaibridge when the farming proposals were executed. Some liberties were taken intentionally.

Background

Issuance can impact accessibility, price, and engagement/usage of the project/product. Considering we have several HNY supply routes to the community the intent isn’t to drive the price down with all this HNY but to indirectly drive the price up through growing adoption. Can adoption be gained without issuance? Yes probably, but while diluting the holders typically will result in price going down it in theory provides opportunity for accessibility, this can be a good thing. With price going up you are strengthening the current holders but you are beginning to restrict access. Do we need to use issuance as a control for price or for the spreading and accessibility of honey? The answer I believe is both, we need issuance to control price while achieving our goal for adoption. How do we control the price of honey while still continuing to grow the community through issuance? *Put it very simply you just need demand to be larger than supply and in theory it doesn’t matter what your supply is if demand is greater. Earlier today a 2nd round of farming proposal was drafted. I among others support and contributed to this proposal. Below is the outline of my decision

Farming is the current method we are using to incentivize liquidity and token adoption on honeyswap. I am not going to debate that.

The question is:

  • How much liquidity do we need? $100M-$200M /24hr in liquidity
    • This was done by looking at liquidity on Uniswap when they were starting to pick up adoption
    • Given ~$150M liquidty this provides us with with apprx. 35 tokens with >$1M each in liquidty
    • $1M liquidty is ideal for worse case slippage fees any lower liquidity and adoption is unlikely
    • This provides us opportunity to ‘target’ the microtrader
  • What is maximum HNY we can use for farming and begin seeing a rebound in price? Max 300HNY/mo
    • If we keep our maximum supply of farms below 300HNY/mo we should see price rebound. Consider this is a 60% decrease in farming. 300 may seem like a lot but it is still a huge decrease from the current 720HNY a month.
    • My estimation are estimations found here and are not perfect. One major consideration is demand is not static you don’t need a 1 for 1 reduction in supply to offset demand. You only need a portion of the supply to be cut off to incentivize demand growth
  • Which farms should we incentivize?
  • How many farms

Given the above findings we went with the following:

  • 160HNY (+100HNY pending to expire) – this is 140 below target maximum of 300 (remember the big 3 farms of 600HNY expire today)
  • 17 total farms – we went a little heavy on this one in my opinion but this will give us a lot of new data to make better decisions for next month
  • 6HNY pairs vs 11 non-HNY pairs – we are pretty Flipped on this but as pointed out below But I don’t believe this will break the proposal
  • Market Leaders v Network Pairs v Reddit – we kept pretty true to the desired ratios by the polling community

I believe this will grow adoption, rebound HNY price, and provide us with a tremendous amount of information to make an even better proposal next month.

4 Likes
Proposal process setup change/improvement
#13

Hey man, I just want to correct you on one thing, the poll you keep referencing shows that the community PREFERS HNY pairs to non-HNY pairs.

#14

I support the proposal that we’ve made here. I do wonder though if we can mine data from other farming projects fro future farming proposals, rather than just focus on data we can produce ourselves, which will take a long time and maybe always be sparse. uniswap itself and sushiswap in particular would be good case studies with fairly rich data.

#15

@befitsandpiper Oh wow, big miss by me. I probably need to sleep more. The poll rearranges by highest to lowest support. When they rearrange it moved the bottom one to the top and I think that threw me off. Good catch. I wonder if I was corrected multiple times during the discussion and just missed it. A big apology from me.

I tried to look at sushi swap for data but I can’t find the historical farms listed anywhere and I am unsure how to get that data. Good idea if it can be done

1 Like
#16

Btw, @Blazar, we’ve been calling the ren Zcash token wZcash in discussions, but it is actually called renZEC.

Summarizing Farms Situation
#17

We are trying to find a happy medium and it would not work. It is very low for hny pairs and wont attract new people. my 2 cents!

#18

Hello lovewins :slight_smile: How would you change the list? I think there are plenty of HNY pairs listed above. Just curious!

#19

@lovewins the proposal is just shy of a 60%/40% split in favoring HNY pairs.

When link-hny, wbtc-xdai, weth-wbtc expire depending on how this proposal plays out it would be nice to renew the two wbtc farms at 50% reward. Any ideas of what to replace them with that might pair up better for a HNY pair?

#21

Would like to see an xMOON/xDAI pool. It (xMOON) has been a staple to this exchange and brings a lot of attention from reddit. Even a smaller amount would be a nice gesture as many of the redditors are early honeyswap adopters. xMOON/HNY isn’t really utilized much by people buying/selling moons.

#22

Imo stake/hny farm should be the same as xdai/hny. Xdai ecosystem consists in two tokens so thats my reasoning.
my proposal:
xdai/hny 30
stake/hny 30
eth/xdai 15
stake/xdai 15

1 Like
#23

Hny not used by moon holders is the point for that pair. It will still provide liquidity to xdai sense hny-xdai is the largest pair. Tbh hny-moon is probably better for avoiding Imperment losses. I would rarely invest in a crypto-stable coin pair. Your are almost always gonna get wrecked by IL.

@farmerD I think your splitting hairs, the proposal is very close to what you’d like to see. I personally would like to see all the snx,rezec, omg BW paird with HNY instead of xdai but it is what it is. If it’s close enough go with it so we can get some more data to make it even better next time.

1 Like
#24

This proposal is not passing due to contention among HNY holders on the size of this proposal, as well as on the particular pairs chosen. There seems to be decent consensus that the HNY-XDAI pair at least should be funded since this provides price support for our community token, HNY.

How would we feel about instead doing a breakdown like this at first?

XDAI-HNY - 40 HNY
XMOON-HNY - 5 HNY
XBRICK-HNY - 5 HNY
DONUT-HNY - 5 HNY

For a total cost of 55 HNY. This would still leave us with about 100 HNY which we can deploy later in the month if we see good results, support HNY price, and also be able to be shilled to reddit to bring over new community members.

Thoughts? If we like this idea I will create a new proposal and support it. It should be easier to pass, and we may be able to get a few additional people onboard who are on the sidelines rn.

4 Likes
#25

I dig it, what’s the harm in starting small? As was said before we cannot substract HNY from the farms, but we can always add to it even if it’s ongoing. I think it’s a good idea to incrementally add more, see on a small scale first how farms would affect us. Easier to pass, and less risky, sounds like a good plan to me! About the pairs, not sure personally, as we are attracting from reddit I do think it’s smart to get them onboard. What is the reasoning for 40 HNY on the XDAI-HNY pair? Couldn’t we for example go with 20 and have the other 20 allocated to some other pairs that are listed above, which are potentially interesting? E.g Eth/HNY,Stake/HNY or BTC/HNY

1 Like
#26

There’s more support for the HNY-XDAI pair, even from some farming skeptics, because it’s important to have a way to exchange HNY.

#27

It sounds like the consensus in discord is continue on with the current proposal to see if it passes