We’re nearing the end of the first RAD 1M in rewards paid out through the Tinlake Liquidity Reward program. As a first stage in the reward program, we allocated an initial 0.23% of the fully diluted token supply to rewards. This has proven to be very successful growing our Total Value Locked (TVL) to DAI 3.5M with over 100 investors participating.
As we are nearing the end of the RAD 1M budget (it’s in less than 17 days at the current rate) the community needs to decide how to proceed with the rewards.
Parameters to discuss
Allocation for the next stage
With the initial success of the first stage of the Radial Rewards program, we propose to apply the parameter for the second stage to the next One Million in Radial Tokens the protocol awards. With the increase in liquidity and therefore rewards this number should be adequate for a period of at least one month.
Vesting Period
A concern when launching the program was that short term variability of the liquidity in the system could be seen challenging for asset originators to plan with. For that reason we initially set the minimum time required to be invested in a pool to be a minimum of 60 days. AOs experience has however shown that the protocol could already start allowing of claiming rewards after a minimum of 30 days has been reached.
I would propose to lower the minimum period to 30 days.
Reward Rate
The most important topic is the reward rate, how much Radial the protocol awards per DAI invested. The formula to date was very simple and has worked well:
For each DAI invested for a period of 24hrs the protocol awards 0.0042 RAD. This means the longer investors provide liquidity or the more liquidity they provide the more they are rewarded.
Given how successful the Radial Rewards program has been to incentivize TVL in Tinlake, I propose to keep the reward rate the same.
Please share your opinion and participate by voting on your preferred options
What should the next allocation of Radial Rewards be?
First of all, awesome move to start involving the community on governance!
I find it hard to argue from a Centrifuge perspective as I don’t know some parameters:
after the expected month of rewards with 1M RAD @ 0,0042/DAI/day will this governance decision be repeated or is the reward program then finished?
when is the expected token sale and what is the strategy to keep TVL incentives high during that transition?
is there already a (large enough) pipeline of further asset originators waiting to use Centrifuge (to scale the platform)?
Not knowing this I would argue: Centrifuge is still quite early and if the incentive program is so successful, I would counterintuitively increase the reward rate, the total volume AND the lockup period. The reason for that is that I would aim to spike the TVL and shop around the number as an attractor to potential asset originators. The increased lockup period would also force the investors to have ‘skin in the game’ and make a TVL spike seem more credible/sustainable long term. It would further incentivize all investors that put money into Tinlake with an ‘indefinite’ investment horizon - possibly attracting more capital that stays.
Very interesting in discussing this & kind regards.
Increasing reward rate and keeping vesting period for 30 days will encourage more investors to invest in the project and with Token sale into planning stages, it will also help users to invest same amount into token sale when it goes live.
Keeping the vesting period as it is (60 days) remains more investors in the pools and provides the asset originators with higher and more predictable short-term liquidity. The Tinlake-investors proof “skin in the game” for two months too
Thanks for the feedback so far! I’ll try to address a few comments and questions.
No, the question is not about when we finish it but for how long we lock in the reward rate and other parameters.
This is a good point, we have to make sure we don’t cannibalize our protocol with people who want to withdraw to participate in the sale. We should probably revisit this as we get closer to a sale and have a good idea of what the price and market will look like.
Yes, AOs are on track to originate at least 3M in the next few weeks doubling the pools in size if the protocol can provide sufficient liquidity. Let’s see that we can generate enough demand with the program to fill this gap!
Migrating Tinlake to Centrifuge Chain (an ongoing project) will greatly reduce the transaction fees and enable users to invest at much lower minimums. Building on Polkadot will give us L1 benefits at L2 scalability
With the vote concluded, we’re happy to announce the outcome of the community voting on the rewards:
We will lock in the reward rate as follow going forward:
We will lower the minimum vesting period for rewards to 30 days. This means you need to stay invested in Tinlake pools for at least a 30 day minimum to claim your rewards.
You will earn 0.0042 RAD/DAI invested each day for every day you are invested in the pool. This reward will be awarded past the 30 days as long as you keep your investment.
This rate will be locked in until the next 1M in RAD have been paid out to protocol users
We will be implementing these changes ahead of the expiry of the first program.
I am looking to invest and support early stages, but looks like incentive plan will run out in 7 days, so would not make a lock period for incentive. Is there any plan to extend incentive program? Or is that it.
Thank you for the update and link. That is great news Ivor. I decided to go ahead and invest to support the project with 5000 Dai regardless. However, on this news I will likely invest more.
