Rebalancing of Base Liquidity Incentives (2023-12-29)
We have applied two sets of updates over the last 30 days
1) Dec 01 2023 (Epoch #5)
Analysis
As rewards epoch #5 started on Dec 01 2023, we assessed that market health indicators were within optimal levels for all markets (utilization, on-chain liqudity vs market usage).
Specifications
WELL rewards emission rates have been scaled for all market. Rewards share per market were kept the same for USDC and WELL reward streams.
| Epoch # | Total per epoch | Start timestamp | Start date |
|---|---|---|---|
| 5 | 14,778,846.15 WELL (6.795% of total) 36,812.46 USDC |
1701468000 | Fri Dec 01 2023 22:00:00 GMT |
| Reward distribution (% of allocation) | cbETH | DAI | USDbC | USDC | ETH | wstETH | rETH |
|---|---|---|---|---|---|---|---|
| WELL supply | 20% | 20% | 0% | 20% | 36% | 2% | 2% |
| WELL borrow | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| USDC supply | 20% | 20% | 0% | 20% | 36% | 2% | 2% |
| USDC borrow | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
1) Dec 29 2023 (Epoch #6)
Analysis
We observed the following change in market conditions over the course of epoch #5:
-
Sizeable supply positions have been pulling out of USDbC market, causing utilization to often fluctuate above optimal levels during the last 28 days. Total supply for USDbC decreased from 2M to 591k from Dec 21 to Dec 29.
-
USDbC circulating supply has significantly increased since the launch of USDbC lending market on Seamless Protocol. USDbC can currently be bridged via Stargate bridge, but cannot be bridged via Base native UI, as it has been deprecated in favor of Native USDC. Unless the community decides otherwise, we propose to maintain the current measures that aim to deprecate USDbC in favor of Native USDC.
-
Demand for lending wstETH significantly increased (>3X TVL increase). On-chain liquidity levels for the token have also increased sufficiently to sustain this growth.
-
DAI market usage has remained high relative to the token’s circulating supply (~9.5M token circulating supply vs 5.15M total supply on Moonwell). DAI lending market growth is currently limited by this factor.
Specifications
Given these observations, we decided to shift some of the DAI supply-side rewards in favor of wstETH supply-side rewards. We also maintained deprecation measures for USDbC.
| Epoch # | Total per epoch | Start timestamp | Start date |
|---|---|---|---|
| 6 | 15,754,807.69 WELL (7.244% of total) 36,812.46 USDC |
1703887200 | Fri Dec 29 2023 22:00:00 GMT |
| Reward distribution (% of allocation) | cbETH | DAI | USDbC | USDC | ETH | wstETH | rETH |
|---|---|---|---|---|---|---|---|
| WELL supply | 20% | 20%→18% | 0% | 20% | 36% | 2%→4% | 2% |
| WELL borrow | 0% | 0% | 0% | 0% | 0% | 0% | 0% |
| USDC supply | 20% | 20%→18% | 0% | 20% | 36% | 2%→4% | 2% |
| USDC borrow | 0% | 0% | 0% | 0% | 0% | 0% | 0% |