Half of the current round (XIA) of liquidity mining has been carried out. It is time for us to discuss the next round.
In this round, we managed to Half of the current round (XIA) of liquidity mining has been carried out. It is time for us to discuss the next round.
The next round is named after the SHANG(商) Dynasty (about 1600 B.C. ~ 1046 B.C.)
In this round, we managed to attract liquidity providers. Until now, there is over $4M liquidity in the AMM. Because AMM’s liquidity is vital in MCDEX, we should continue to incent the liquidity providers.
I have received many suggestions from the community. @johnbrooks33 gave an insightful proposal A Boost In The Economic Richness Within The MCDEX Ecosystem to suggest:
- The mining rewards should be vested in 3 Months.
- Give an additional 20% MCB to the miners who add liquidity to the MCB Balancer pool.
And some guys from the Chinese community also suggest introducing some staking mechanism of MCB to reduce the impact of the inflation of MCB. Our community gives these suggestions/proposals because the MCB has a significant inflation rate in the early days, and we should incentivize who contributes long-term value to MCDEX.
Besides, someone suggests dividing the trading fees to the MCB holders who stakes the MCB to some smart contract.
I call on the community to discuss the following issues:
How long should the next round Shang last? Two weeks or four weeks?
How many MCB should be released in the round Shang?
Who should be incentivized? What’s the portion?
- Perpetual AMM liquidity providers
- MCB AMM(i.e Uniswap/Balancer) liquidity providers
- Traders of Perpetual
- MCB staking holders
Should the mining reward have a vesting period? If so, how long?
I am glad to share some of my thoughts on these issues. Note: These are only my own opinions, not final decisions.
Although the inflation rate of MCB seems enormous, the circulation of MCB is only 6M (excluding the MCB held by the foundation) in the first six months, which should be carried by the market. And I think MCDEX will grow fast in the next few months, which will increase the demand for MCB. What’s more, I’m worried about market manipulation more than inflation. Because of the small circulation, it is easy to manipulate the price of MCB in the early days, which makes the MCB investors suffer. As a result, I suggest keeping the mining reward unchanged, thus 2MCB/block.
The Perpetual’s AMM is essential. We should continue to incentivize the liquidity providers. However, current the Perpetual’s AMM pool is still not large enough. It is because the mining rule does not encourage people to bring more people to mining. The more people join, the less portion they get. Maybe we should set some KPI of the liquidity target, and make the mining rewards relative to the KPI.
We should encourage people to hold MCB rather than sell out. And it is also essential to make the MCB have good liquidity. Rather than just staking the MCB, I prefer to incent MCB holders to add MCB liquidity to the Uniswap pool. As the Uniswap pool has the most massive MCB liquidity now, we should not spread it elsewhere. We should allocate some mining rewards to the MCB Uniswap liquidity providers. Considering that the MCB pool has only $63k while the Perpetual AMM has $4m, the mining reward allocated to the MCB Uniswap should not be too large, maybe 10% is good for the next round.
The daily trading volume from traders who are not AMM LP is still tiny ( around $150k). As the trading volume is the source of value for the Ecos-system, maybe we should incent the traders? However, I don’t want MCDEX to be another FCoin. If we don’t find a reasonable way to do this, we should do nothing. We have the MC-Fund production in our roadmap, which could increase the trading volume. However, the audit of MC-Fund is scheduled for September because the audit agency is bustling. We have advanced the R & D plan of Mei, which should also increase the use case of ETH-PERP.
I don’t know whether the vesting is necessary. I hope to hear more suggestions from the community about investing.
There are the real Oracles in SHANG(商) Dynasty: