How to Select SEFI LP Pairs with Rewards - Bullish Guy


*Figure 1. 2 poll results conducted via SecretSwap’s official Telegram channel regarding

Dear SEFI stakers,

This is Bullish Guy.

Please read this post carefully. SEFI is a governance token. Each one of us makes our ecosystem strong by voicing our collective interests.

Today, I am writing this to invite SEFI stakers to share their ideas on how to select the next LP pairs with SEFI rewards.

According to Enigma, new LP pairs with SEFI rewards are added based on the TLV value ($5m) of the bridged asset on Secret Network. Ex) Rune, RSR

However, I personally have an issue with this process from a SEFI holder’s perspective.

The $5m TVL requirement driven by the bridge mining incentive decision by Enigma eventually dictates which pairs are added with SEFI rewards for SecretSwap.

This is a threat to decentralized governance of SEFI and as an ecosystem. SEFI holders have no voice in the current implementation.

Therefore, I would like to invite SEFI stakers to share their ideas on how to find the next LP reward pairs that would increase the interest of SEFI stakers as a whole. If you have specific LP pairs, please feel free to share and your reason as to how it can maximize the collective interest of the SEFI stakers.

Once I hear from you guys, I will collect your comments and ideas. By the end of the week, I will compile so that we can all vote and express our interests.

Looking forward,
Bullish Guy

12 Likes

Hi Bullish Guy, thank you so much for raising this issue. Though I’m not against new pairs with over $5m TVL being added to Secretswap LP pool, there should at least be a governance process for SEFI holders to propose and vote which pairs should be added to the pool.

6 Likes

Very valuable thread, thank you.

I think the strategic questions informing these decisions are just as important as how the decisions should be made (both now and in future).

  • Would we rather see a long tail of semi-illiquid pools, or a short tail of very liquid pools?
  • Do we care more about SEFI price impact short term (which has an impact on APY and visibility) or do we care more about absolute liquidity on SecretSwap?
  • How will these decisions be impacted by the launch of other DeFi products in the Secret Ecosystem (such as Sienna)?
7 Likes

I agree - the sooner governance is implemented the better. But it is coming!

Personally SEFI/LUNA, sSCRT/LUNA or the same with UST would be excellent. Though, from what I understand, this is an impossibility at this time.

I’m in two minds about adding new pairs.

Yes, it will draw more users to Secretswap, but it will downgrade the APY which as it stands is still a very impressive offering that catches the eye - and the APY can still be accessible with the current pairs implemented. For example, I’m a simple man. I utilise sSCRT/SEFI LP.

In my opinion, sSCRT/SEFI LP is/should be the primary focus of the Secretswap pools as it brings liquidity to both SCRT and SEFI. This reads as the best case scenario for the Network and ecosystem. I view additional pairs as a bonus. I think it goes without saying that higher reward incentives will bring more people over - (though this is totally opinion based until such a time that I can find data to back this up, and of course I am not completely disregarding the notion that additional pairs will bring further users and liquidity to Secretswap.)

That’s my humble two cents. Or pence.

Thanks for the post, Bullish. :relaxed:

3 Likes

Governance is definitely needed for $SEFI holders to have a say in the decisions for LP pairs and rewards. I would also like to see some transparency into the amounts of $SEFI released for the pairs.

4 Likes

SEFI stakers should be able to express and vote on the new LP pairs being brought out. The current $SEFI is only a reward coin without any utilities which made no incentives for people to hold.

New LP pairs might bring higher adoptions and TVL but we do not want just some random ones being added (which dilute the main pools in the long run)

2 Likes

Dear Bullish Guy,

I am indeed at one with this proposal of great significance.

I feel it is imperative for our voices to be heard as SEFI holders, for without governance we are a mere shadow of our true selves.

Thank you,
Razzzzzz Frog

2 Likes

Thanks for bringing the importance to the fact that SEFIs primary function is to act as a governance token for SEFI holders. In the current state, SEFI has no governance features, but Enigma devs have confirmed that development is in progress. However, it was also mentioned that developing this feature correctly is tricky and requires a careful approach to ensure that staking and voting can occur simultaneous.

I personally wouldn’t want the development of governance mechanisms to hold up progress of other features that may add appropriate liquidity or boost the usage of SecretSwap. I see the adoption and usage of SecretSwap as most important. At the same time, I want the SEFI community to be able to participate in ongoing decisions that shape the direction of the application. One person’s view on a new pool may be different than another’s.

To find the balance, I’d wish to see an interim governance system in play while the SEFI community waits for the governance system to be implemented. Happy to hear what the community thinks is a good middle ground!

5 Likes

Why do I wan’t someone else deciding on what pairs to list on the network?

When I bought into the idea of Secret, I was already aware of how much this is a community run network, for the people, by the people. Any society (which this is by the way) without this and which is blindly led should be doomed to fail if not in the interest of it’s users.

'“It was also mentioned that developing this feature correctly is tricky and requires a careful approach to ensure that staking and voting can occur simultaneous.” - That might very well be the case, but let’s find a way to let SEFI users and Secret users have their say ASAP instead of relying on Telegram polls or forum posts. I understand that resources are limited and that work is in-place, but progress needs to be reported and fed-back, especially before any new pools get released. At the moment, only the Enigma team are deciding what pools will be implemented.

If the community were to vote on pools don’t you think we would see even more TVL in those pools if the community could build up their own reserves to add LP. Not only then do we see an increase in TVL we instantly add some decent liquidity for folks looking to move into their pairs.

3 Likes

Hi Bullish guy,

Thanks for putting up this issue. I think we all agree the importance of the governance on SEFI. After all, SEFI is a governance token and our voices need to be heard, not only new LP pairs but also for other implementations.

Sincerely,

Roy.

2 Likes

Thanks for creating this form Bullish…I believe if a plan of action was laid out that detailed the strategy of adding pairs beforehand and communicated to the community in a forum like this, it would have been sufficient since being able to vote on a proposal isn’t currently implemented .

Being open and having a conversation keeps the community engaged and a layer of trust is established until a formal process is implemented.

I trust the MIT gigabrains!!!

3 Likes

I believe although the post here mentions the LP pair to de decided upon by governance and not unilaterally by the secret foundation or Enigma team, this is a broader matter.

Given the team have acknowledged this governace role of SEFI has to be given to the token, there are other priorities on their plate, so it is a matter of humam resources that the team has to solve.

But in meantime, gauging community interest/“governamce” will have to be done by other means like a post on the forum, or are there any other means that can facilitate this with a level of transparency?

I don’t think anyone here is disagreeing on the essential nature of governance or that it should be prioritized in the development pipeline - but if we can’t answer the below questions then we can’t make the correct decisions (regardless of how the decisions are made).

Can we use this thread to begin discussing these core questions :point_down:

End Bridge-mining ASAP, is dead IDLE money inflating SCRT supply and 90% dumping right back for ETH or BTC and going out.

Instead, funnel that SCRT inflating energy from the Bridge as an hourly market buy of SEFI and burn. Or add it as a LP farming bonus, you get SEFI + SCRT to enhance current APY’s.

Its all about Liquidity, the bigger the OCEAN, the more whales, sharks and fish will come! Liquidity is everything!

2 Likes

Just some thoughts from my perspective:

What is the main reason to use an AMM? To swap one token into another in a decentralized manner. To do that in meaningful quantities there needs to be sufficient liquidity in the most popular pairs. So that should be one of the main priorities. It’s of course nice to have a large set of tokens that can be traded, and this can bring attention to SecretSwap from other communities, but there needs to be a solid foundation to build from.

Ideally we prioritize long term growth over short term gains, assuming we all are in it for the long game. However, it should not result in large losses in the short term as that could drive away holders and create unnecessary FUD. How to achieve this is of course the hard part to figure out. Some may say we should prioritize value growth, but if the price jumps up too much that might attract a ‘pump and dump’ mentality which I expect will only be detrimental to the community long term.

Now compared to other, similar DeFi products, we have the advantage of being the first frontrunning resistant AMM using private by default tokens with a working product as far as I’m aware. That gives us an advantage, but we should still focus on expanding features and incentives to stay ahead of the game. Therefore, I would prefer to see dev-time being spent on additional features such as the cashback system. I see a demand from a part of the community to prioritize governance, but perhaps we could reach a fair compromise to make sure we don’t hinder new features that will improve and promote usability. I think I saw one of the devs mention the fact that a lot of SEFI is locked up as spySEFI as a (big) issue as that introduces possibilities of double voting. Personally I wouldn’t mind unstaking, voting and restaking if that would significantly reduce design complexity. Sure that introduces a few more steps to vote and it costs a bit in fees, but it’s not that big of an issue really and if that would enable the devs to introduce governance while prioritizing new features I’d be happy to have that as a compromise for the next months.

I am not a fan of polls to decide governance issues, be it on the forum or on telegram, as this does not take into consideration the amount of SEFI each voter holds, a tenet in governance. A, for me, acceptable short term compromise would be that the team proposes changes followed by a week to vote on a forumpoll, with a supermajority (66% or even 75+%) needed to reject the proposal. However, I would prefer to not implement such a solution as this will slow down implementations during a critical phase in Secret Finance existance.

If you find any weaknesses in my reasoning, please respond below.

4 Likes

Hey Tor.

  • I would be in favour of a short tail of very liquid pools - with sSCRT/SEFI pool being the priority (higher weight to attract further liquidity to it? As this benefits the SN on both sides of the LP.)

  • I cannot speak for everyone, but I think it is fair to say the short-term price impact of SEFI is not a priority right now. We all appreciate how early this is for the project, and also appreciate that there are certain uses of SEFI we would like to see implemented in order to see it reach its great potential.

  • On the topic of other AMM’s such as Sienna, all I can simply say is fundamentals speak the loudest. Therefore, it is extremely important that we get this right so we can see SEFI grow into all it can be.

(Also, the Sienna token distribution schedule is wack and it seems they can’t quite decide if they wish to be a swapping platform or a trading and lending platform. We will be fine.)

2 Likes