Proposal 14 Amendment

DAO Discussion
1

Context

On October 24th, the DAO voted to change the distribution of SUNDAE emissions to help diversify pool rewards and attract liquidity of several trading pairs to the exchange. One of the solutions was to introduce fixed emissions to the ADA-SUNDAE (pool 08) to encourage users to better delegate their SUNDAE to smaller pools/new pools to attract new liquidity. I believe that this has been proven successful due to current market sentiment towards digital assets and changes to SUNDAE’s emissions. While the change improved the overall health of the DEX, since emissions became fixed, users can no longer vote for pool 08, which goes against SUNDAE’s initial mission to allow users to delegate to their favorite pools. There are also economic concerns regarding a single pool having fixed emissions over a prolonged length of time and the ambiguous language of Proposal 14 requires more DAO participation if the fixed emission rate to ever be altered. I propose possible amendments to Proposal 14:

Solutions

  • Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th percentile excluding ADA-SUNDAE pools.

  • Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th 85th percentile excluding ADA-SUNDAE pools.

  • Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th 90th percentile excluding ADA-SUNDAE pools.

  • Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th 95th percentile excluding ADA-SUNDAE pools.

Conclusion

This change would allow users to delegate to ADA-SUNDAE again while keeping the same parameters for rewards for all other pools. This allows delegation to safely leave ADA-SUNDAE in the future if total delegation for pool 08 fell below 30%; a larger portion of emissions to be available to all other pools. Increasing the eligible delegation for rewards to 85-95% makes it easier for outside pools to earn rewards but gradually increases the risk for bad actor pools to influence rewards. Changing emissions again will create another period of inconsistent rewards in a crucial time in markets as many users will likely update their delegation. These changes to rewards will also be felt over a minimum of 3 days and potentially affect the TVL of the ADA-SUNDAE pool. I wanted to give the DAO the opportunity to comment or propose additional changes as there is already a temperature check that exists for a similar topic.

2

I would highly recommend that if the percentile is raised, a requirement that one of the tokens in the pair be either ADA, SUNDAE, or it be an explicitly whitelisted pool.

As you raise the percentile, it becomes easier and easier for someone to create a secluded pool that serves no economic purpose other than to farm rewards.

1 Like
3

So something like, “Remaining 70% emission to be distributed to 80th percentile of pools where ADA is the parent pair, excluding ADA-SUNDAE pools?”

4

Something like:

  • Option 1: Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th percentile excluding ADA-SUNDAE pools.

  • Option 2: Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th 85th percentile excluding ADA-SUNDAE pools. Additionally, restrict SUNDAE emissions to only pools that have ADA or SUNDAE as one asset of the trading pair.

  • Option 3: Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th 90th percentile excluding ADA-SUNDAE pools. Additionally, restrict SUNDAE emissions to only pools that have ADA or SUNDAE as one asset of the trading pair.

  • Option 4: Give SUNDAE/ADA special status to give the ADA/SUNDAE pool (pool 08) special status. Giving ADA/SUNDAE(pool 8) a fixed 30% allocation irregardless of the delegation and maximum delegation cap of 30% and consider any excess ADA/SUNDAE(any pool) delegation as abstained and still serve a purpose of diluting other pools voters. Remaining 70% emission to be distributed to 80th 95th percentile excluding ADA-SUNDAE pools. Additionally, restrict SUNDAE emissions to only pools that have ADA or SUNDAE as one asset of the trading pair.