[TIP-18] New SWTH/ZIL pool on ZilSwap (ZRC-2 SWTH) with SWTH reward incentives

  • @galaxydefender21

    Great proposals, 100% support

  • Good proposal. Thank you for the initiative.

    I also like "Should this incentive scheme for the SWTH/ZIL pool work well, we will take it as a signal and build upon other incentive programs on PancakeSwap, SushiSwap or UniSwap in a similar fashion, utilizing SWTH from the SDF to drive ecosystem expansion and user adoption across various L1 blockchain networks."

    100% agree that if this works well then we should firstly open up incentives for SWTH on Pancakeswap and Sushiswap where liquidity has become dry and later expand to other L1 like Avalanche, Polygon etc which are already supported by Poly Network.

  • @galaxydefender21 said in [TIP-18] New SWTH/ZIL pool on ZilSwap (ZRC-2 SWTH) with SWTH reward incentives:

    Once funds have been received, the Switcheo Labs team will create the SWTH/ZIL pool and allocate SWTH to ZilSwap's reward distributor and where users can start providing liquidity and earning rewards.

    Is the Reward Distributor an onchain or offchain feature?

  • @Devel484 Computation is off-chain but the reward distributor is on-chain.

  • @galaxydefender21 SWTH/ZIL pool on Zilswap is needed and will be a great addition to both communities.

    My concern is how liquidity will flow inside this new pool? The most probable scenario is that already existing users from Demex withdraw funds for having a better yield on the new pool.

    What about funding SWTH/ZIL pool with SDF to reach 3m ZIL TLV? (SDF will own the initial LP)


    • the initial pool will reach immediately the eligibility to earn ZWAP rewards.
      -SDF will earn an interest in form of ZWAP and trading commissions.
      -Users of Zilswap will have a deep pool to buy from, as planned.
      -No outflow of capital from Demex.
      -No spending of 5m SWTH to boost liquidity.
      -When the pool grows, funds return to the SDF wallet.

  • @galaxydefender21 Renting liquidity is temporary. When rewards are finished - liquidity drops.
    And I am not sure we will be able to keep that liquidity for the long term.
    The best way I see improving liquidity is actually creating such liquidity by the fund or foundation by itself.
    Targeted liquidity is ~200k USD for only 2 months. And 50k USD of SWTH is given for 2-3 months in terms of rewards. 50k USD of SWTH is 25% of the whole targeted liquidity.
    So maybe it's better to create 50k of constant SWTH/ZIL liquidity by the fund rather than giving this money for temporary for only 2-3 months???
    25k USD worth of SWTH could be easily sold for zil without heavy market pressure.
    In that case the SDF will actually own these funds SWTH + ZIL. Moreover I expect SWTH price to grow over time much higher than current levels and eventually we could have 100-200 k worth USD of liquiduty on Zilswap which is owned by the fund.

    PS - sorry for long post

  • Ohh. I saw your comment! Have similar thoughts!!!
    Happy to be not the only one having similar idea!!!!

  • @AxValidator Comparing with the APRs on some existing pools on ZilSwap, the SWTH rewards could also incentivize existing ZilSwap liquidity providers to rebalance and move liquidity over to the SWTH/ZIL pool until it reaches ~100% APR, which would be reached at the target liquidity of 3M ZIL.

    Also, the 3M ZIL value is quite substantial (~$180K-$200K). We envision the SDF funding more reward mechanisms and community initiatives in the future, so we propose utilizing a small portion of it for the incentives, rather than using it to seed the pool with liquidity.

  • @galaxydefender21 Do you understand that you proposal is actually spending of SWTH just for renting liquidity on ZIlswap for 2,5 months???
    What magic should happen to keep that liquidity on ZilSwap after rewards are finished?
    Why do you want to make this proposal now instead of waiting for Carbon launch?
    Why do you call 550k USD worth of SWTH unused if documents were not opensourced and Carbon not launched to start utilization of this fund?

    Sorry that I am being honest with you - but this proposal is far from ideal.
    Or you need to make better explanation of benefits than only that:
    "Once liquidity of over 3M ZIL has been reached for the SWTH/ZIL pool, liquidity providers will also be eligible to start earning ZWAP rewards.
    As the core developers behind ZilSwap, Switcheo Labs' close collaboration with Zilliqa has already introduced many of their users to Switcheo, Demex, and the Carbon protocol. We can thus fairly expect the SWTH/ZIL pool to continue drawing in both ZilSwap and Zilliqa users to Carbon more easily, especially users with some prior interest in the protocol and have one foot through the door. The SWTH incentives will thus serve as an additional push to capture this audience fully."

  • SDF should stay available for development purposes. Consider a proposal to divert a portion of the 10% tax to go to a new fund for initiatives such as this.

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