AIP 59: Liquidity Mining on Bancor

[agriimony]

Summary

• Increase $AST on-chain liquidity by providing liquidity rewards on Bancor
• 20K $AST will be used as liquidity mining rewards on Bancor
• Bancor will match with equivalent USD value of $BNT
• $AST to be emitted over 1 month, $BNT to be emitted over 24 months

Specification

• Bancor has whitelisted $AST on its DEX with a 50K BNT (~100K USD) trading liquidity limit
• 20K $AST will be used to incentivize initial liquidity on Bancor
• Bancor will match with equivalent USD value of $BNT
• $AST to be emitted over 1 month, $BNT to be emitted over 24 months

Rationale

AIP #45 proposes to increase rewards for those who provide on-chain liquidity for $AST. Bancor is a DEX which supports single sided liquidity. This means that we would be able to boost on-chain $AST liquidity without needing to sell any of the $AST in our treasury. The Bancor protocol itself puts up its own $BNT token to act as a counter pair against all tokens in its protocol. On top of that, Bancor offers impermanence loss protection to anyone who provides liquidity in its pools for more than 100 days.

Recently, Bancor has passed a proposal to whitelist $AST trading on its DEX. We propose that AirSwap helps to bootstrap this initial liquidity by providing 20K $AST as the initial liquidity mining rewards for 1 month. On top of that, Bancor will also match with an equivalent amount of $BNT to be emitted over a 24 month period. This is roughly equivalent to a 30-40% APR if we attract ~$100K in liquidity on Bancor.

The APY should not be too high as compared to our current staking rewards, otherwise we would risk people unstaking and moving the AST to Bancor instead. If the AST pool on Bancor becomes popular, we can propose to Bancor DAO to increase the trading liquidity limit in the future.

Copyright

Copyright and related rights waived via CC0.