Initial Liquidity Incentive Parameters

Hello fellow Sigmadex enthusiasts :slight_smile:

Since we are getting close to our launch event, we need to discuss how we want the initial parameters to look.

I am hoping to achieve the following with this post:

  1. Highlight the required variables for the SDEX token genesis
  2. List potential parameters with adequate reasoning behind the selections
  3. Create a discussion around the prospective options
  4. Obtain potentially different variables from the rest of the community

Why these parameters are important:

We need to ensure liquidity and incentives are sufficient for SDEX holders as new capital will always need to enter the ecosystem. The success of Sigmadex is reliant on a stable and engaged community.

Ideally a diverse set of individuals will consider and analyze proposals, vote and actively back their opinions.

Public Liquidity Transformer Parameters:

lpInitVest

lpInitVest is the initial vesting period denominated in days when an LP token is deposited. A longer period could lead to more price stabilization however it could also alienate users from providing liquidity if the period is too lengthy.

How it works:

Upon depositing LP tokens there will be an initial vesting period relative to the (lpInitVest) variable. Once this duration has elapsed the SDEX can be sold back to the market.

Proposed Value: 10 days

Eg. LP tokens which were deposited into the transformer contract is paid out in SDEX after 10 days.


rewardLock

rewardLock is the length of the bonus vesting period. In theory the longer the duration, the less downward pressure there will be for the SDEX token. Since we intend to reduce downward pressure, the lockup period for additional rewards will need to be lucrative and attractive enough to capture liquidity.

How it works:

After the user provides liquidity they are entitled to a bonus amount of SDEX tokens vested against the rewardLock variable.

Proposed Value: 30 days

Eg. John receives a bonus amount of SDEX tokens for providing $200 dollars worth of liquidity.


rewardRate

rewardRate is the additional reward amount or “discount” given in SDEX to the liquidity provider as a bonus for depositing their LP tokens.

How it works:

This enables the liquidity provider the ability to claim an additional SDEX bonus relative to the rewardRate variable after the initial vesting period. In the case above, it would be after 10 days.

Proposed Value: 20%

Eg. If John deposits $100 USDT and $100 in SDEX for a total of $200 in liquidity deposited, he will receive the equivalent value in SDEX after the initial vesting period plus (20%) $40 in rewards immediately vested against the rewardLock parameter. Once the appropriate time has elapsed these bonus SDEX tokens will be available for restaking or to sell on the open market.

4 Likes

We cant have outrageous values so im thinking on the lines of:

lpInitVest: 1 week
Tough to say but a week initial vesting isnt too long in my books.

rewardLock: 30 days
This is a bit arbitrary imo but 30 days could be sufficient.

rewardRate: 15%
Rationale is that early on the risk is typically less.

Interesting concept to bootstrapping liquidity. I am assuming the bonuses are minted and total supply increases?

I’d like to model some of these variables out and revisit before launching

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Lol no mate sigmadex has a fixed total supply of 1 billion, I’d advise you to visit the tokenomics. :thinking:
Now on the topic peter shared, providing liquidity isn’t fit for all imo, single sided staking should be available with penalty for early unstake as well

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I like the LP transformation concept. The variables are important, I would start low and open up higher to gauge the appetite.

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