#26 Weekly Liquidity Mining Incentives for cSwap pools (Phase 25)

cSwap Discussion
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Overview:

cSwap DEX has been launched on the Mainnet. With strong frameworks, good mechanisms, and a robust build, a good but healthy incentive system is imperative for the growth of the DEX. Keeping this in mind, we open the discussion to the community on an upcoming proposal to start the next phase of liquidity incentives on cSwap DEX by allocating 51,331 CMDX and 214,974 Harbor for 7 days - to be distributed as per the model for Liquidity rewards for CMDX and Harbor. These rewards will start when the current reward phase ends. From this week onwards, CMST pools will be receiving Harbor rewards.

Two Ranged pools, USDC.axl/CMDX, and USDC.grv/CMST, will receive dual incentives.

The Master pool will receive around 50% of the total CMDX incentives allocated for the phase. The other 50% will be distributed equally amongst the Child pools as external incentives. From the 50% distributed for Child pools, 10% will be allocated to the Ranged pool category.

Let’s have a quick look at the rewards mechanism before proceeding further:

There are two types of pools on cSwap DEX: Master Pool and Child Pool. Master Pool would be used on cSwap and other apps as a prerequisite for earning token incentives.

cSwap has two incentive distribution parameters; the ‘Master Pool/Child Pool Rewards System’ mechanism and the ‘External Incentives’ mechanism.

There are multiple combinations for the rewards mechanics. Still, in a nutshell, any liquidity provider will earn maximum rewards only if they provide liquidity in both the master pool and one or more of the child pools. A better understanding of the reward mechanism can be gained from cSwap docs.

The breakup of rewards for each pool is as follows:

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Note: Rewards are in $CMDX and $HARBOR tokens.

As the protocol has now reached a mature stage, the current incentive structure will be optimized based on discussions and consensus within the community. We will continue to monitor and evaluate the effectiveness of the new incentive system to ensure its alignment with the growth and sustainability goals of cSwap DEX. Your feedback and input are highly valued as we strive to maintain a thriving and robust ecosystem for our community.

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Could we consider stopping rewards on pools that serve no purpose? For example, Huahua/x or shib/x or juno/x? The management of rewards seems detached from reality, and I’m concerned when you say that cswap has reached maturity and yet I see pools with only £200 in liquidity?! Can we refocus our efforts a bit?

I am very attached to the potential for cswap to guarantee the liquidation of positions in Harbor without any problems, and I believe we should incentivize pools with collateral on Harbor! As for the others, they can go to Osmosis… why have an arb/cmst pool? It doesn’t make sense to me either.

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Appreciate your valuable inputs and understand your concerns. Our current rewards system operates based on the liquidity of the individual pools. Higher liquidity pools receive higher rewards as they are contributing more to the ecosystem. The point to remember here is that incentives drive liquidity; without any incentives, a pool might not be attractive enough for potential liquidity providers, defeating its purpose.

cSwap was launched with the aim of facilitating trading for a wide array of assets. Naturally, these assets come with varying degrees of interest and liquidity, and our goal is to incentivize the maximum amount of asset flow possible to ensure the smooth functioning of our DEX.

In regards to your comments on the allocation of rewards, we are actively working towards adjusting the structure with the upcoming version (v2). In this iteration, we will run a beta phase wherein the incentives would be allocated more towards the ‘Master pool mechanism’. The base CMDX rewards, which we term as external incentives, would reduce and instead emphasize CMDX liquidity .

On the topic of prioritizing pools with collateral on Harbor, this is an issue we are currently addressing. We intend to give higher incentives to Harbor-listed asset pools, and this will be implemented once Harbor emissions are live on cSwap pools. In this scenario, veHarbor lockers would become the directors of each weekly emission, enabling them to control where the incentives go and this would emphasize user participation and decentralize the incentive distibution system

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Here are a few ideas with the goal of adding value to Harbor, which I believe is a good project with strong fundamentals:

  1. I think Harbor is a winning protocol with its stable vaults, mint fees, and liquidations. It would be helpful if someone could share some figures regarding the liquidations, as it is an important aspect.To ensure smooth operations, it is important to guarantee that liquidations occur on cswap to prevent liquidity from flowing out of Comdex. When an atom is liquidated on Crescent, Osmosis, or Secret Network, it is unlikely to return to Comdex. Therefore, focusing liquidations on cswap would be beneficial.
  2. The Harbor token has suffered in terms of price due to a lack of value and farming-and-dumping behavior.
  3. One idea to mitigate the price drop of Harbor, stimulate liquidity on cswap, and other platforms is to create one-way vaults from Harbor to other assets. These assets can be the ones that the protocol collects from liquidation fees or stablecoin minting. While the protocol needs to maintain liquidity, a portion of it can be redistributed. Technically, I believe Comdex has the necessary components to create such vaults.

3bis. It’s also possible to incentivize the relevant pools on cswap by offering the assets collected by Harbor.

I want to reiterate that Harbor is a good project! As for cswap, I think it is a good project, but not as strong from a technical standpoint. Trying to manage limit orders seems to unnecessarily complicate matters for minimal benefit. In my opinion, shade protocol has a beautifully constructed swapping system (with an integrated router), although their liquidation mechanism appears to be less robust than Harbor’s.

At some point, Harbor holders need to be rewarded, which is currently not the case, despite the protocol likely being profitable…

Similarly, why aren’t liquidations on Harbor rewarded like on Commodo?

It’s time to take action; the market has been completely purged. A beautiful era awaits us, and we will make it there. It’s the land of dreams (a French song)

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