Thanks Kaselol, it would be great to have your help. Iāll discuss with the team where we need the most help and how to ensure any help is valued and earns from the very start.
Thanks for the detailed explanation. It would be great if new liquidity finds its way into xDAI in search of DeFI but with cheaper tx costs. I can completely understand the tx fees biting as this was the main reason why a lot of small timers including myself got priced out of the main net. If this new liquidity can be attracted to xDAI and into projects like Honeyswap, xBalancer and AGVE without a lot of friction it could do wonders to this community as well! I have not really used the fiat onramps available to xDAI or ported from other L2ās but it looks like there is still a bit of progress to be made to have this automated and easier for newbee users. Will be following this post closely to see how your proposal fares with the 1Hive DAO and for any future announcements!
Our reasoning is mostly around maximising compensation for people coming in from projects such as Balancer. What I mean about that is there is a bit of an arms race in some of these projects on the main network where they squeeze more and more benefit to liquidity providers to try to get a bigger cut of the liquidity being staked. Since our target market is main network projects and people new to exchanges in general then we want to ensure that we can provide a simple but very competitive return to people who stake on this particular DEX.
Balancer allocates 60% of all coins to LPās. The project is centrally governed and developed so thereās little need to recognise the value that open source developers or community members bring. As a developer myself thereās no benefit to me. If I found a zero day I might earn but the flow of value is clearly to LPās primarily followed by to Balancer Labs to distribute to its team. I donāt mind that, itās their model and so good for them. We want to replace that central model with a DAO model but we want to make sure those LPās see benefits at least what they currently see on Balancer otherwise it makes it more challenging to win some of that liquidity over. Itās already a challenge to win them to a lower market cap network with some additional complications with bridges so we have to ensure we can at least ensure they continue to see high rewards.
And so our view is that this approach allows us to create a tokenomics model thatās simple and focused on those LPās while supporting the community. We canāt change the tokenomics model behind HNY to fit what Balancer users might be familiar with and want and we donāt want to be a negative impact on HNY or 1hive. This approach just feels like itās less complicated and more flexible for this project. Now it might be that in the future if thereās sufficient liquidity on xBalancer that both DAOās decide to fold xBalancer and its liquidity into a future version of Honeyswap. I donāt know practically how that would work but it is a scenario Iāve considered. Iām open to alternative models around HNY or HSF though, as long as it preserves a competitive edge to main network projects we will be targeting.
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Thank you warmannet123 for the warm welcome, I look forward to working with you and talking more.
Thatās a good point, onramp and offramp continues to be challenging.
We currently use two providers, only one of which supports xDai natively. Theyāre one of the better providers but their support for countries such as the U.S. isnāt that satisfactory. We are in the process of adding a third which is from an interesting London based company, a new contender in that field. Theyāre behind the other providers but weāve known the team for several years and have a good relationship with their team so weāre guiding them more towards adding support for xDai.
Offramp is more of a challenge, many people donāt like to put their money in until they know how to get it back out again. The two providers we use are working on offramp solutions but theyāre not there yet.
So weāre working on some alternatives as well. Weāre working with Mastercard and some Mastercard providers who are working on offramp mechanisms so we could enable direct spending of xDai held coins. Thereās also a couple of banking service providers weāre working with to work out if we can build a joint solution for integrating with Open Banking services. Thereās a big push in the UK at least by challenger banks to offer crypto services similar to Revolut but where customers retain true custody of their assets. But all these things will take time but hopefully weāll see improvements in onramp and offramp over the next year.
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I would at least give a really good look at the work around $HSF. What your describing is exactly the purpose of the $HSF token, a sustainable farm token.
$hny as a governance and economy token (honey is money) that should be able to meet the needs of the governance and team funding needs.
Honeyswap currently receives 0.05% of every swap same as uniswap. The intentions of the $HSF token is to take a percentage of that which can be adjusted by governance but no less than (i believe 50%). So going forward $HSF will get 0.025% of every swap as a minimum. $HNY the other. This similar model could be applied to the balancer fork your proposing so we have a singular balanced and sustainable farm token for the entire ecosystem. hsf forum post
Afaik the $bal token currently has no revenue stream with a 9 year project Token incentive for LPs. Do you plan on keeping this same model? The protocol does have built in features that can be adjusted although they are currently set to 0 as default. See current state balancer fees below:
There are three types of protocol fees:
- Trade fees. Right now, all swap fees go right to the pool, but adding a protocol-level swap fee would redirect some small portion of these fees. By default it is zero but it can be changed by BAL governors.
- Withdrawal fees. This fee would apply to anyone leaving the Protocol Vault (i.e. moving liquidity off of Balancer). By default it is zero but it can be changed by BAL governors.
- Flash loan fees. These apply to any flash loans utilizing Balancer liquidity. By default this is set to 25 bp - it should never be zero as there should always be some cost to take a flash loan. It can also be changed by BAL governors.
All of the fees above will be routed to a single vault which is controlled by BAL holders. So the BAL holders can then decide what to do with those fees, i.e. make them claimable by BAL holders for direct revenue or utilize the accrued fees as a treasury which can grow over time.
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Is same token as Ethereum network ?
No, this is a fork of Balancer, another team is making it, and it has a different governance structure.
Iām looking at $HSF and how it might apply to xBalancer.
Youāre correct that Balancer has no revenue model and so revenue flows straight out to LPās. Considering the average fee that pool creators set and the fact that xDai gas fees are so low then I donāt see adding a 0.025% revenue fee as particularly problematic. It would still be significantly cheaper than doing business on the main Ethereum network. Savings allow me as a LP to either increase my own fee or keep my fee the same and attract more trade.
As well as savings, as a LP I want to get the most benefit that I can in terms of coin payouts.
My first questions would be around airdrops of $HSF, whether $HSF is pre-mined and how it splits across projects.
If I add liquidity to Balancer then I earn fees from the swaps plus BAL coins. Being early into Balancer was extra rewarding because those early BAL coins came to me as a LP as a larger proportion. 60% of coins flowing out to Balancer LPās on top of the earnings from swaps.
As xBalancer launches and a campaign is started to attract new liquidity, the case would need to be strong to be a first adopter of xBalancer.
On Balancer LPās get 60%, that means 40% is going elsewhere. 60% becomes a base level of return to the LP segment of earners and for many LPās they wonāt care too much where the 40% is going as long as it benefits the project and hopefully drives up the value of the 60%. Examples of unacceptable uses of that 40% would be excess to founders or to projects that donāt return value in some way.
So this is behind my question regarding airdrops and splits across projects. If thereās an excess of airdrops to people or projects that donāt benefit xBalancer in some way then it would be a leakage similar to excess to founders or a private company not contributing value back. If that 60% is reduced since thereās a fixed supply being split across multiple projects then that could also make it less attractive. Itās not a fixed rule though because 40% of a healthier economy and higher value coin is better than 60% of a weaker economy and lower value coin but the case for a reduced allocation to xBalancer LPs would need to be built clearly at launch.
Also, presumably youāre proposing $HSF as the farming token and $HNY as the governance token and so launching xBalancer as a 1hive project directly since governance needs to be able to manage economics and since $HSF applies to 1hive projects then presumably economics would be 1hive DAO matters?
So Iām not saying yes or no, Iām just putting on the hat of a LP and trying to evaluate the benefit of both models at launch and after a period of time.
Perhaps we can discuss some of these ideas on Discord. If a simpler model can be found then the team is open to it, we just want to ensure that we focus on the teams ability to attract new liquidity in a competitive market while being able to support that new liquidity and not disrupt the growth and benefit of Honeyswap and Agave.
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Love the idea and voting in favour. Quite a tight timeframe it seems, but it also seems youāre well prepared. Good luck setting things up!
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Based on the current situation, I would like to say a few points:
ā HNY is still in its infancy
ā” The community has reached a very active stage
ā¢ Based on LP, BAL/HNY is a very good choice to supply agriculture
ā£ Based on what Iāve learned about Balancer recently, Iām going to hold the BAL, so work hard
Finally, I propose: Hony is an autonomous community with a rich cultural heritage. I suggest an airdrop for active users in the community. Of course, this will be used to provide agricultural income
I can see what @Monstrosity is saying. Ultimately I think the community wants to see the ecosystem grow, and the demand is clearly there for a Balancer fork. I would certainly be interested in attending a live Discord voice chat to talk more about the pros and cons of including $HSF and $HNY as sustainable farming and governance tokens. This clearly binds our communities much closer together and gives xBalancer a jump start in liquidity and users. Letās pick a day and time to have an AMA/town hall about this.
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Great idea. How can a lowly pleb such as I help support this project?
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This is a very good suggestion, I agree, then remember to call me when you amm
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We def need to go like few people already said above to select some date/time and we make some meeting(discord or some other platform) to see what is the best option/ because conv through forum is not so good way and someone can misunderstand something.
for meeting idea
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Itās a good suggestion, Iām talking to Monstrosity about how this might work.
If we can work out something quickly at a high level then we can open it up to a wider Discord discussion, perhaps as early as this week. Itās a matter of testing whether it simplifies things, creates the right incentives and looks after all stakeholders. Iām keen to work something out reasonably quickly because I want to focus more on the platform and finishing off a couple of features.
Some good suggestion. All these suggestions help and do get picked up by the team so thanks for taking the time to add these thoughts.
That makes sense. Iām going through this initially with Monstrosity to get it clear in my head how this could work as an alternative model to what weāve set out and then we can have a Discord group meet to discuss this new model and agree some details. Your suggestions are much appreciated.
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Everyone can contribute, itās just that at the moment weāre focusing on the governance and tokenomics model which is distracting from testing and finishing a couple of features off on the DEX. But we want to make sure we agree a strategy for governance and tokenomics first since itās so important to get this right.
Once weāre done that we can kick the project off properly. Areas where weāll need help include coding on a couple of features weāre finishing off although it may be quicker for us to finish them since weāre familiar with the code base, branding since weāre still currently using the Cent branding, outreach and marketing which we have plans for, documentation/materials since I find it so frustrating that most DeFi projects have next to no documentation for new users, applied use of Smart Pool templates since thereās a lot of R&D happening to create new templates but no ones picking these up and creating actual businesses or projects from them, GUI/usability testing since one area that has a lot of room for improvement is the GUI such as useful ways to filter pools or create funds or reports. Even general advisory and brain storming. We donāt want to just be a Balancer fork, we want to use Balancer as a starting point but apply it much better on xDai.
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Looking forward to your good news, it will be successful
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