Current SEFI distribution parameters

SecretSwap community,

Here’s a post to update current SEFI distribution. As you can see below, there are some changes from the initial proposal.

  • This post is intended to bring transparency and provide rationale for existing changes.
  • With SEFI governance expected to go live by the end of June, the community will be able to vote on these parameters.

SecretSwap user rewards: SecretSwap user rewards, primarily LP rewards have been increased compared to the initial estimates. The primary goal of increasing rewards (and in favor of LP rewards) is to maximize TVL (the primary KPI for AMMs) on SecretSwap. CSHBK rewards were set to provide SEFI incentives that initially cover 0.3% swap fee charged by SecretSwap.

Stakers: SEFI staker reward percentage remains the same as the initial announcement while SEFI rewards for SCRT stakers have been removed. This decision was made because the process required to distribute SEFI rewards to SCRT stakers is manual and very inefficient.

Development fund: SEFI allocation for development fund was slightly reduced to in favor of SecretSwap user rewards.

Thanks!

8 Likes

Thank you for this. New allocations look much better.

Many thanks for the transparency, very appreciated

Appreciate the transparency Can! Do you perhaps have the breakdown of how it looks like in 4 years period?

I think the current CHSBK does more bad than good for the SEFI price. Let me explain from my experience as probably one of the most active users on the exchange.

I already fetched over 1 Million CHSBK in the past couple of weeks, not for fun but mainly for price arbitrage, soo much SEFI I’ve gotten for free on top of the arbitrage profits, I sold it all for BTC. Of course, these are just my trading decisions, and it does not mean everyone is doing the same. However, I explain further who currently is “everyone” in secretswap.

I want to make the main point that just 2 or 3 people besides me are doing extensive arbitrage, draining the pools back and forth, earning juicy CHSBK and potentially selling the free SEFI. Like if 99% of the volume is done by 3 people only, I have no on-chain evidence for it to show you right now, but my evidence is based on the hundreds of hours I spent on secret swap during the past month, where you get to notice the real activity in the DEX, it is quiet, and when it is not quiet is because the outside world has volatility and arbitrage takes place at secretswap. So honest and genuine privacy-oriented trading is extremely low. And well, beyond the point of the purpose behind every trade, I believe the current setup is not helping to incentivise more and new users to secretswap with full potential. Furthermore, I believe the current setup is causing a downward spiral pressure on SEFI price, which affects the APR% of the pools, which gets further aggravated with the late overall market bearishness. Also worth remind the native high inflation nature of SEFI?

For that reason, I would suggest implementing a cap or diminishing returns as to how much CSHBCK you can earn. The larger the size of the trade, the less cashback with some sort of inverse-proportion algorithm. Of course, I am no programmer, but I believe you get the idea of what I am trying to say.

Bonus slightly off-topic:
Another thing I deem urgent, not just for SEFI but for secretswap in general. Is to implement the slippage option. You find yourself waiting for prices to refresh (+45 seconds why?), it is suitable for 3 traders on the platform with a bit of patience. It is unusable for 30 active traders.

BSC traders are coming from a quick chain with successful transactions. So if they find the same speed/frictionless + privacy bonus, they will like it. However, if they get a bad experience waiting for price updates, be lucky enough to send a transaction before the price gets pushed away from the slippage error, then I don’t think they will get a good experience. It is like replacing your current SSD with an HDD; what would be your reaction? I could justify the HDD if I made 1 or 2 trades a month due to privacy concerns and not for huge volumes of trading.

Cheers.

3 Likes

So you’re doing price arbitrage manually with the GUI ? I find the CHSBK token being 1:1 with SCRT actually interesting, the idea is to get back some of the slippage fee (which is static 30bps). It just so appears that indeed there are not a lot of people using secretswap these days so the CSHBCK rate is high. Assuming more users it should go down to “normal” rates.
The UI price refresh is definitely an issue to be addressed I concur.

1 Like

I agree CSHBCK is decreasing the dollar value of SEFI significantly.

Introducing Cashback tokens without governance or any value capture mechanisms in place was a bad idea as there’s no incentive for folks to HODL SEFI atm.

Future is still really bright for SEFI.

If this is a belief that’s widely held by SEFI holders, SEFI holders can vote to reduce SEFI allocation for CSHBK token pool.

This is how LP rewards are currently distributed among LP pools:
image

We would like to introduce a proposal to reduce ETH-WBTC weights to 200 (reduce by half) and distribute those rewards to SCRT - ETH and SCRT - WBTC pairs. This will increase yields on SCRT pools and will enable ETH-WBTC trades through SCRT-ETH and SCRT-WBTC routes.

Please share your feedback

9 Likes

Sounds Legit :+1: . Would be nice to have a plot “Trading volume versus SEFI incentives”.

3 Likes