RedRabbit33
osmo1hxfd
•
5/31/2023
If anything, I believe REGEN deserves to be saved from the chopping block. I believe that the amount of incentives the REGEN/OSMO pool receives is worth the investment, particularly due to the growing carbon market, but also as part of Osmosis’s commitment to being a carbon neutral chain & part of Cosmos Zero, because the NCT/OSMO pool is being incentivized by REGEN, and also because of protocol owned liquidity via the REGEN/NCT pool. Furthermore, overall token volume, in dollar terms, since December, has remained consistent, despite an ~50% drop in token value.
Because incentives are fee weighted, it seems that the REGEN/OSMO pool could realistically generate more than $10 a day in fees on a consistent basis, and therefore not be on the chopping block (if that is the criteria being used), if it increased its swap fee from 0.20% to 0.30%, or even 0.50%. CHEQ may also be able to get away with such a trick as well.
Reworking incentives is important. BUT…personally, I think it would be much more efficient and effective in the long run if the multi-hop discount wasn’t tied to incentives and instead was a separate benefit that governance could provide, as the value of the multi-hop discount is just as valuable, if not more, to current low-volume pools (particularly ones that are still active projects and still have a rather significant amount of liquidity - eg. $100K or more in liquidity.)
UPDATE: The DOT/OSMO and AVAX/OSMO pools received ~6.65x more OSMO incentives than the REGEN/OSMO pool (~113 OSMO per day vs ~17 OSMO per day), yet collected only ~2x amount in fees (~$12 vs $6) (DOT & AVAX pools collected $0.106 in fees per OSMO per day vs REGEN = $0.353 in fees per OSMO per day; REGEN gets ~3.3x more in fees, in dollar terms, for every OSMO that was spent).
The ARB/OSMO pool did slightly better than the AVAX and DOT pools, but still fell short of the REGEN pool. The ARB pool received ~113 OSMO per day in incentives and collected $17 in fees per day. That equates to $0.15 in fees per OSMO per day, which is ~42% better than the DOT and AVAX pools but still ~57% less than what the REGEN/OSMO pool did. l would venture to guess that FIL and LINK are among the worse performs in terms of fees collected for the OSMO that is spent because they never received bootstrapping incentives like DOT, AVAX, ARB, and FTM. If they had, or if they do, I don’t expect them to perform any better though, given the $1.60 it costs to bridge these tokens over.
The REGEN/OSMO pool actually collected roughly the same amount in fees this past 7 days, in dollar terms, on a per OSMO per day basis, as the HUAHUA/OSMO pool; the HUAHUA/OSMO pool received ~43 OSMO per day and collected $17 in fees (or $0.395 in fees per OSMO per day), while the REGEN/OSMO pool received ~18 OSMO per day and collected $6 in fees ($0.333 in fees per OSMO per day). I would estimate that at least 50% of the $0.06 difference(~19%) can be explained (in a statistically significant way if an analysis was run) by three factors: 1) HUAHUA’s marginally higher staking rewards (29.9% vs 22.5%: a 7.4 percentage point difference); 2) REGENs slightly higher inflation (17.3% vs. 15.3%: a 2 percentage point difference); and 3) relayer fees to deposit REGEN (0.00315 REGEN x $0.075 = $0.00023625) currently costing ~25.6x more than HUAHUAs (0.21 x $0.0000440 = $0.00000924) in dollar terms and network tx fees. (Personally, I believe the passage of HUAHA Prop #48, and its implementation of a 100 HUAHUA tx fee will do more harm than good, but we will have to wait and see). The HUAHUA validator on Osmosis 5% commission (assuming that its operated by the HUAHUA chain ) could also explain some of this difference, assuming that the OSMO is being traded or used to subsidize the relay costs. (Perhaps REGEN - and other chains too - would benefit from operating their own validators and getting into the active set on Osmosis like HUAHUA, STARS, XKI do)
