Proposal: Should the DAO start incentivising pTokens on Arbitrum to boost pNetwork’s blockchain diversity?
Summary: The pNetworkDAO is currently paying out about ~80,000 PNT per week as incentives to develop liquidity. This proposal would modify the current liquidity mining scheme by reducing the pNetworkDAO expenditure where liquidity is already well-developed and kickstarting new incentive programs to address growth on new chains. In particular, a 30% reward reduction would target Curve-on-Ethereum on the pBTC/sBTCcurve pool in favour of new initiatives to develop pTokens on Arbitrum. Unallocated rewards, if any, will be preserved and kept in the treasury.
Motivation: Liquidity is a key component of our ecosystem and it is especially important for bridges. For the pNetwork to develop liquidity and grow across multiple blockchains, it is paramount to set up a liquidity mining program that is both effective and efficient. The current incentive scheme has achieved the goal of developing a deep trading pool, but is not efficient as it directs a large portion of PNTs towards the pBTC/sbtcCrv liquidity pool on Curve that presents deep liquidity and low trading volumes. This proposal is an input to restructure PNT incentives for them to be more effective in their goal of increasing liquidity within pNetwork.
Specification: The current liquidity mining scheme breaks down as:
- Recurring 50,000 PNT (62.5%) targeting the pBTC/sBTCcurve pool on Curve on Ethereum
- Recurring 15.000 PNT (18.75%) targeting the pBTC/ETH pool on Uniswap on Ethereum
- Recurring 15.000 PNT (18.75%) targeting the PNT/ETH pool on Uniswap on Ethereum
- One-off 90,000 PNT targeting the initial boost of the pBTC/WBTC and PNT/ETH pools on Quickswap on Polygon
Specifically, the pBTC/sbtcCrv LP on Curve (Ethereum) presents ~$55M in tvl with $15/30k in daily volumes for pBTC/sBTCcurve. The proposal brings forward a 30% reduction of PNT incentives directed to such a liquidity pool, unleashing 15.000 weekly PNT tokens.
Additionally, this proposal brings forward the launch of a liquidity incentive directed at the fast-growing Arbitrum ecosystem (Ethereum L2) to develop initial traction for pTokens. Specifically, if the proposal is approved, the liquidity incentive on Arbitrum would be launched for up to 15,000 PNT tokens per week (redirecting the ones saved from the reduction on the pBTC Curve Ethereum LP).
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