In an effort to align the protocol with incentives evenly spread across the board, many big SHARE holders have agreed that the best course of action proceeding forward is to merge the USD-ETH pool rewards into the USD-USDC pool. The inspiration for this is to provide users a pool with the least amount of volatility possible. For reference, DSD only has a USDC pool and are very successful with it. We will round this LP pool up and give it 30% of total seigniorage rewards. This pool is the most important pool in the protocol, and this needs to be reflected in it’s payout. By giving such high rewards to this LP, more people will be incentivized to buy USD above peg and provide liquidity. Liquidity breeds liquidity, and the deeper the pool, the less volatile USD price will be after each positive rebase.
Next, we have decided to reduce xBOND payout to 40%. We believe this is very fair and still makes xbond extremely attractive for users to bond at 1:1 during negative rebase. During positive rebase, investors will now have to make a decision on whether or not to bond into xbond or compound into the USD-USDC LP. The ever changing APY will most likely continue favoring xbond as the most profitable rewards pool - even at 40%
SHARE holders - rejoice! We have decided to double rewards and give 20% for holding SHARE. We believe this is a fair number and allows SHARE holders to more aggressively increase their footprint in the protocol by taking their rebase rewards and compound them into either the LP or into xBOND.
Finally, that leaves 10% seigniorage rewards to ETH-SHARE lp. Although it seems small initially, the competition in the SHARE-ETH LP will be much less than just holding SHARE. This means there is a strong chance the APY will be greater for providing liquidity than just holding SHARE. At 10%, (plus farming rewards - both rewards will be merged into one pool soon), there is still plenty of incentives for people to provide liquidity.
An overview of the above breakdown can be seen here:
xBOND - 40%
SHARE - 20%
USDC-USD - 30%
SHARE-ETH - 10%