Hi i am opening this post to discuss utility for our upcoming new perp token.
Until sam opens his discussion post we can discuss here amateurly and see community’s ideas
My supply breakdown:
%10 devs (logaritmic unlock) not lineaar
%1 airdrop to alpie holders (direct unlock)
%4 disturbate to xalpaca governance lineerly
%10 smthing like warchest (lineer unlock)
%50 - farming on referral/perps - over many years
%25 for new token stakers!
Max supply : 500 million
Utilities/tokeneconomics
%70 of fees goes to lp
%15 goes to new token burn
%5 goes to new token holders (must lock)
And %10 goes to alpaca burn
Lock new token to get %5 of revenue
Lock new token and get tiered fee discounts ( up to %15 , cutting up to %5 from alpaca burns and %7 from new token burns, %3 from new token holders )
Btw bitmex gives very less than this discount and binance margin gives only %5 for margin
That means %15 for futures is much and can be reduced.
Lock new token to get more bonus from referrals.
Referalls get %5 of fees that goes to new token burn, and it can up to %10 if enough token locked!
Btw. Giving so many farming tokens to market maker bots are not profitable. Saw this in many protocols (such as mango or srm) because market makers will aldready make arbitage with our lp and binance so we should give them less and more to referrals or holders
For the sake of the protocol, I hope we are not genuinely thinking this is a good idea. If - as a long term holder - u sign up to the chaos a new token creates then gg…
Also look at historical situations where this happens….all those protocols went down…
Liquidity providers can be incentivised with performance fees…or give them AUSD
Can we first hear the rationale behind why a new token is needed. Bootstrapping liquidity for a Perp exchange is without a doubt very hard, but is a new token the solution?
So before we decide it, can anyone explain what the new token’s usage is. If team has made a decision that we are going to release a new token, what’s the expectation of new token, instead of just use it to give liquidity providers some treat.
Is this token like alpaca reward token? I mean the tokens main utility is rewarding and promised “maybe” nothing?
Also you said alpaca (with that revenue and burn) even has low liqudity (you are right!) , how team plan to get liqudity for a new token ?
The teams that release second token always got unsuccessful in past. Why do you think you will be ?
Past examples : Xvs released vrt and then discard at low price . Sxp released srt and then discard. Bifi released pots and its price goed to hell and under ico. Qtum released qi and also goes under hell . Whats the alpaca’s diffrence there?
There are many questions waiting answer from you. Hope you release more details soon and don’t directly go to governance
Once the governance discussion is up on this, and you have more details, please feel free to ask questions and discuss there. I am guessing it will be up next week, because we have another good announcement this week that you all will like.
now we are discussing having a new token for perpetuals.
Instead of consolidation, we are discussing dividing our strength into several parts.
I don’t get the rationales behind this - except for the fact that devs would earn more on new token which they would be emitting, but at the same time it would harm interests of Alaca holders.
Perpetuals that I know use quite simple rules. E.g. i like the simplicity of Unidex, which from all the fees charged (swaps + perpetuals) gives back 60 % to LPs / 40 % to devs & Unidex holders (as USDC rewards which they receive on their address each couple of days).
IMO, Alpaca protocol can use e.g. performance fees and use these fees to give:
70 % to LPs - 15 % for Alpaca burn - 15 % to xAlpaca holders or e.g.
70 % to LPs - 10 % for Alpaca burn - 10 % to xAlpaca holders - 10 % to devs.
LPs are earning if traders are loosing.
Traders are earning, if LPs are loosing.
That is how it works for UniDex perpetuals. The initial estimation about how much the LPs can earn was around 30 - 40 % yearly and that was the initial incentive for the LPs to put their money in the pools.
On top of this LPs are earning part of the fees (currently 60 % of all the fees go to LPs on top of what they earn on traders).
This summarizes the incentives for LPs (credit: Unidex docs):
"All settled PnL is taken / given to the LP which is how liquidity providers are rewarded for their market-making.
Trading fees are also sent to poolers for a net amount of 60% of the trading fee. This helps LPs stay afloat during prolonged onesided and short term extremely volatile markets which can be found in the “My Rewards” part of the pool UI. Losses and liquidations contribute to the “My share”.
Why is this model used?
Studies show that traders lose more often in net PnL than win. EX: Robinhood ( a popular stock trading platform ) shows that 97% of day traders lose more money than make money.
All pairs are traded against a single pool thus not needing to build liquidity for more exotic pairs or uncommon pairs in the market.
Allows for programmable and expansive liquidity pools. As any protocol can build strategies around the pool growing TVL and market activity around the protocol.
Breakdown
By providing LP you are going against the traders long term net PnL. As traders lose money then you accrue rewards however, if traders make money then the pool decreases in value which also decreases your claimable amount.
The pool has a withdrawal fee thats variable ( currently 0.6% ) and a lock of 3 days to prevent gaming the system. "
That’s once everything is fine and running with a lot of liquidity but the problem is to make people enter the LP when they see the initial 0% APR when the LPs are opened for the first time
The 0 % would be showing only before the very first trade is closed. Once the first trade is closed, we are able to show the %. The more trades are closed, the more precise this % for LPs becomes.
The protocol I mentioned before did get enough liquidity only by explaining how the system will work. Moreover - they began with only 25 % fees going to LPs and swiched to 60 % later - to be more close to what GMX is doing.
I did post more info about what LPs are earning, but the spam bot dissabled my answer and needs to check it first. So only a small part from other perpetuals docs:
“All settled PnL is taken / given to the LP which is how liquidity providers are rewarded for their market-making… Studies show that traders lose more often in net PnL than win. EX: Robinhood ( a popular stock trading platform ) shows that 97% of day traders lose more money than make money.”
I would say you can attract them by explaining what they will make ie how much of the performance fees they will get.
However - If we believe a “promise” is not sufficient, I would say we can also temporarily subsidise the LPs by redirecting some of the performance fees from LYF (which are real) and then tip over to perp performance fees when the perpetual platform has sufficient traffic
