Warden Finance - Base Liquidity Incentives
Hi everyone,
Upon the passage of the proposal to promote Warden Finance as market rewards manager on behalf of the DAO, we wanted to share our rewards distribution plan for the upcoming year and also provide an update in regards to the first changes we have made.
We are happy to answer any question or provide further details if you need. Feel free to follow up in this thread or reach out to me directly (TG: @hboisselle, Discord: @hboisselle)
Base Rewards Distribution Plan
In order to provide better user experience, our rewards distribution model aims to be as consistent as possible through time. We will use an emission schedule with epochs of fixed duration (28 days) with a gradual increase in allocation.
Total amount: 217,500,000.00 WELL
Epochs: 13
Epoch duration: 28 days
| Epoch # | % per epoch | Total per epoch | Start timestamp | Start date |
|---|---|---|---|---|
| 1 | 5.000% | 10,875,000.00 | 1691791200 | Fri Aug 11 2023 22:00:00 GMT |
| 2 | 5.449% | 11,850,961.54 | 1694210400 | Fri Sep 08 2023 22:00:00 GMT |
| 3 | 5.897% | 12,826,923.08 | 1696629600 | Fri Oct 06 2023 22:00:00 GMT |
| 4 | 6.346% | 13,802,884.62 | 1699048800 | Fri Nov 03 2023 22:00:00 GMT |
| 5 | 6.795% | 14,778,846.15 | 1701468000 | Fri Dec 01 2023 22:00:00 GMT |
| 6 | 7.244% | 15,754,807.69 | 1703887200 | Fri Dec 29 2023 22:00:00 GMT |
| 7 | 7.692% | 16,730,769.23 | 1706306400 | Fri Jan 26 2024 22:00:00 GMT |
| 8 | 8.141% | 17,706,730.77 | 1708725600 | Fri Feb 23 2024 22:00:00 GMT |
| 9 | 8.590% | 18,682,692.31 | 1711144800 | Fri Mar 22 2024 22:00:00 GMT |
| 10 | 9.038% | 19,658,653.85 | 1713564000 | Fri Apr 19 2024 22:00:00 GMT |
| 11 | 9.487% | 20,634,615.38 | 1715983200 | Fri May 17 2024 22:00:00 GMT |
| 12 | 9.936% | 21,610,576.92 | 1718402400 | Fri Jun 14 2024 22:00:00 GMT |
| 13 | 10.385% | 22,586,538.46 | 1720821600 | Fri Jul 12 2024 22:00:00 GMT |
| Total | 100.0000% | 217,500,000.00 |
2023-09-01 Rebalancing of Base Token Liquidity Incentives
On September 1st 2023, we have rebalanced the reward rates for the ongoing epoch ending on Sept 8. (epoch #1)
Issues addressed by the update
- ETH utilization is high (has spiked close to 100% and currently stands at 75%, at kink)
- DAI borrow activity is non-existant even though supply is quite high
- cbETH supply is non-existant. cbETH IRM and rewards are prohibitive and non-attractive.
Description of changes
- Allocate supply-side rewards to cbETH market to help bootstrap liquidity. The proposed allocation has high probability to attract >$1M total cbETH supply given the aggresive yield:
- 16% APR supply-side rewards at $1M cbETH total supply
- 8% APR supply-side rewards at $2M cbETH total supply.
- 4% APR supply-side rewards at $4M cbETH total supply.
- Maintain ETH rewards high to stimulate more supply in order to decrease ETH market utilization
- Allocate supply-side rewards to DAI market to keep liquidity levels high until borrow activity is bootstrapped
Specification
| Reward distribution | cbETH | DAI | USDbC | ETH |
|---|---|---|---|---|
| WELL supply rewards (% of allocation) | 0% → 20% | 0% → 20% | 55% → 25% | 45% → 35% |
| WELL borrow rewards (% of allocation) | 0% | 0% | 0% | 0% |
| Reward speeds | cbETH | DAI | USDbC | ETH |
|---|---|---|---|---|
| WELL supply rewards speed (WELL per second) | 0 → 0.90 | 0 → 0.90 | 2.47 → 1.12 | 2.02-> 1.57 |
| WELL borrow rewards speed (WELL per second) | 0 | 0 | 0 | 0 |
cbETH market liquidity was successfully boostrapped with over $2M supply once rewards were allocated to the market on Sept 1st.
ETH market utilization remained high throughout the epoch, even with the relatively aggressive rewards allocation.
