Time lock mechanism to incentivize holding ALCX.

faizG

In addition to adjusting the reward percentages I think it would give the team more flexibility to incentivize holding ALCX if we utilized a lock period.

The lock would give users the option to lock into a pool for a period of time. The benefit of locking is access to instantaneous maximum pool rewards. If the user would rather not lock their capital then the percent rewards they receive over time would increase up to the maximum.

For example, If I were to agree to lock my capital into the SLP pool for 2 weeks I would be able to instantaneously begin to collect the maximum percentage of rewards that my share of the pool could receive. Once the lock period has been reached then I could exit the pool same as a user who did not lock.

If the user decides not to lock then the reward payout would start at say 25% and increase X% per day until the max reward percent payout is met.

I think adding a time component to the reward emissions allows for a more nuanced approach and gives the team another lever they can pull to incentivize users to hold ALCX.

Would love feedback on this.
-FaizG A.K.A SmoothBrainCapital

travisformayor

I am all for this, adding a modification suggestion: Instead of a lock, do a 'charge up'. After you stake you start with a low reward, and over the course of X amount of time slowly ramp up the the maximum farming reward for that stake pool. Can be a few days or a few weeks. The idea is to make the only cost to unstaking is the time you put in to charge up that stake. There is no penalty to leaving early, and no one is locked in a pool the need to get out of. I think it creates the same result and incentive, but is kinder on the users.

JaLa

If I understand FaizG correctly, I believe he is proposing both a time lock and "charge up" concept. LP can choose (a) lock up at outset to receive max rewards immediately or (b) no lock up and and charge up to max over the same period of the lockup.

travisformayor

JaLa Oh I apologize I didn't see the charge up part was included in the original post. I guess my main point then is to keep the UI, user experience, and development work needed as simple as possible and pick only one of the two mechanisms. They both achieve roughly the same thing. A lock up is only slightly different than a charge up, in the end you get access to the full reward after a delay. Extra features and choices can be added over time, but the first version should be the simplest possible implementation of the idea.

faizG

@JaLa That is correct. @travisformayor I agree that either would work and the simplest implementation of this would be ideal especially if/since devs are busy with more important work. But having the option to lock and receive immediate max rewards might incentivize more folks to lock which could be more valuable to the protocol in the long run. For instance this could be another metric which to measure confidence/strength in the project. Its like TVL but TVLL.

jshea

For inflationary coins the best way to align incentives for recipients of rewards and the protocol owners is to discourage farm + dump and encourage farm + hold. This proposal does that.

However, adding something like the CRV lockup + boost mechanism (which this proposal is essentially getting at) is probably too much for the devs to implement considering we have only a handful of devs on the team. Focus for devs should be on adding new strategies.

I would vote against this type of proposal on that basis.

I would like to hear what the community thinks about smaller scale timelock mechanism on withdrawing rewards, which could be implemented quite easily by the devs. I speculate that this could bolster the protocol through a barrier to entry for farm + dump strategy. A month long timelock on claiming staking rewards would see us lose a portion of the farm + dump TVL, but stabilize the price and make long term holders feel more comfortable with the protocol.

Risks:
1) Loss of significant portion of TVL from farm + dump whales
2) Difficulty integrating with yield farms leading to further TVL losses
3) Short term price loss

Benefits:
1) Incentivize holders
2) Price appreciation after short term

To be honest after writing this out I am not so sure on the benefits versus the costs here. At the end of the day, yield farms to add to our TVL and benefit the protocol, even if they are not as beneficial as those who are not farming + dumping

faizG

I agree with you. I'd much rather have the devs focus on building out the protocol than concerning themselves too much with protections against token dumps. I think the proposal to adjust pool reward percentages will have the desired effect with the least amount of work for devs.

lxj803

A lock will reduce composability of alcx thus reduce the utilization of alcx. Badger now allows bBadger to be used a collateral in cream: https://app.cream.finance/

chillsauce1

Time-locks are horrible and outdated. Charge up might be a good idea at a later point if we have too much liquidity in the pools.

scoopy

I think these are good suggestions, it's just a matter of developer resources at the moment. We are currently prioritizing upgrading the transmuter and work on v2, and heavily modifying the farming contract would require a decent amount of time and effort in addition to requiring users to migrate. We are currently evaluating some additional talent, and if we get enough manpower, we can entertain making such changes.