Transfer of alpaca emissions from foreign farms to alpaca-busd

As we all know the liquidity of alpaca-busd is relatively too small (compared to the marketcap).
The only way to increase it is to incentivize it. I see that the incentives that are issued in foreign farms have very little impact (if at all) on APR. This is why I propose to move all farm emissions to a single farm: alpaca-busd.
borrowers will see no difference, there will be no added emissions, and the increased liquidity for the alpaca token will allow for less volatility in the price

How can you be certain that borrowers won’t see a difference and that won’t affect the whole ecosystem negatively?

Hey! im not sure of anything. I just think is +EV than have emission on other farms. I find really difficult to believe that borrowers will close their positions bc they have -2% APR on LYF.
And even if this happens, it is necessary to evaluate how much the benefits (more liquidity, less volatility, less chance of a cascade liquidation of alpaca token) cover any damages (less borrower, less fees). I repeat: I believe few borrowers will close their position after the change, but this is just my opinion

Thanks for your suggestion.

We don’t have much to spread around in ALPACA emissions. So we prefer incentivizing pools that generate more revenue, which feeds back to ALPACA holders in the governance vault. The ALPACA-BUSD pair has sufficient liquidity given the state of the market(4Mn), and you can also always trade on many CEXs. I also don’t think increasing APR on this pool will increase liquidity. The liquidity does not seem very elastic to APR because PancakeSwap halved emissions on this pool 1-2 months ago but the liquidity is still the same.

I friendly disagree :smiley: im ok to incentivise pools that generate more revenue, but now we are simply spreading little incentives to any pool, making the incentive “useless” (1-3% APR incentives to 20-100% APR LYF). The real juice is already in the product and borrowers will continue to squeeze it. For the liquidity and the PCS halv, the majority of ALPACA-BUSD are long (ALPACA) positions. Liquidity is the same not bc is inelastic to APR but bc they don’t wanna sell :slight_smile: increasing the apr with a token that those who enter the pool want to hold will only have benefits for liquidity and the ecosystem.
Anyway, thanks for the reply and for your work Sam!

1 Like