Modification has been withdrawn, see IIP-24: MVI Liquidity Mining - - #10 by overanalyser
IIP 24 modification IIP-24: MVI Liquidity Mining -
@Overanalyser 03Apr21
Our goal as Index Coop as manager of the Metaverse Index is to provide the best experience for the customer. This means ensuring that MVI trades roughly in-line with net asset value (NAV) and that the volatility of MVI is in-line with the volatility of the underlying tokens.
However with 15 tokens in the index, the cost of arbitraging the pool is rather high at current gas prices, which means buying the underlying tokens could cause slippage and minting MVI directly could cost over $1000. With such a high hurdle before arbitrage trades become profitable, there is a risk that MVI could experience volatility close to launch, until the MVI/ETH pool has sufficient liquidity.
We have several options to address the problem:
1. Seed initial liquidity;
2. Increase liquidity mining incentives;
3. Remove tokens.
After reviewing the potential outcomes of each solution and assessing the effect to Index Coop and the MVI product, we settled on the following plan:
1. Maximise MVI issuance and liquidity during the first couple of weeks through a high incentive rate for a short initial period.
2. Taper the INDEX rewards during the next 11 weeks.
3. Have a specified taper so that LP’s understand the plan for the liquidity mining campaign and the coop understands the full expenditure.
These modifications are made in concert with the proposal for 90 day DPI liquidity mining.
IIP-28 DPI liquidity Mining #6
Specification
1. 7 Day staking contract with the ability to be topped up (Similar to DPI contract with a 30 day period)
2. Two x 7 days of 100% APY rewards for $10 M Liquidity. This is $27,400 of rewards per day. At today’s 20 day TWAP for INDEX of $34.64, this is 790 INDEX per day. (vs the proposed 700 INDEX per day from the 9th April to the 9th of May for DPI)
3. Then rewards would be reduced to 600 (Week 3) and then a weekly reduction of 50 INDEX per day.
4. In total, over 13 weeks the liquidity mining be fixed at 38,010 INDEX tokens (0.38% of total supply)
5. Liquidity mining of MVI:ETH targets a start time of 12pm PST 7th April.
|Week|Daily|weekly|
| — | — | — |
|1|790|5530|
|2|790|5530|
|3|600|4200|
|4|550|3850|
|5|500|3500|
|6|450|3150|
|7|400|2800|
|8|350|2450|
|9|300|2100|
|10|250|1750|
|11|200|1400|
|12|150|1050|
|13|100|700|
||total|38,010|
||Of supply|0.38%|
Comparison with the initial proposal
The initial proposal, IIP-24, allocated between 9,975 and 22,880 INDEX, so this is an increase in rewards intended to ensure a liquid launch, increasing the potential for arbitrage to take place ensuring the price stays close to NAV.
For: To initiate liquidity mining for MVI/ETH LPs as specified above.
Against: Do not provide liquidity mining incentives for the MVI launch.
[poll type=regular results=always chartType=bar]
# Liquidity mining MVI with modified specification
** FOR: To initiate liquidity mining for MVI/ETH LPs as specified above.*
** AGAINST: Do not provide liquidity mining incentives for the MVI launch.*
[/poll]