Proposal: SCRT on Osmosis - Early pool incentives to mitigate slippage and boost liquidity

By voting YES on this proposal, you show support in adding extra SCRT incentives to SCRT/OSMO and SCRT/ATOM liquidity pools.
By voting NO on this proposal, you signal you don’t wish to allocate SCRT to act as extra incentives for Osmosis liquidity pools.

Following Supernova and the establishing of IBC, there is an opportunity to increase SCRT exposure to the Cosmos ecosystem by encouraging liquidity into new pools in the Osmosis DEX through their Incentive Matching Program.

What is Osmosis?

An AMM built on its own IBC enabled chain, Osmosis is currently the largest IBC enabled cross-chain DEX with ~$580m[3] in locked liquidity at time of writing. Osmosis rewards its governance token, $OSMO, to liquidity providers to incentivize bonding liquidity to certain pools.

Unlike other DEXs, Osmosis has the ability to offer external tokens to pools as additional incentives to encourage organic liquidity. Osmosis will also match the value of any external incentive provided to a liquidity pool, massively increasing the Liquidity Mining rewards on those pools and attracting even more liquidity than either reward program alone.

Previous external incentives have included Akash, IXO [0], E-Money, LUNA [1] and Juno [2], with Juno currently offering a value of ~$35,000 per pool per day for 180 days.

Proposal

We are requesting $5,000 in SCRT per day from the community pool as incentives for liquidity provision to the following pools on Osmosis.

  • SCRT/ATOM
  • SCRT/OSMO

Incentivizing these pools will bootstrap liquidity during the Osmosis Incentive Onboarding process . This request works out at ~250 SCRT per pool per day for 90 days. All SCRT used for these liquidity incentives should be matched with an equal value of OSMO incentives (Governance pending).

These will be split up into the following buckets for each bonding period:
1-day bonding: 35 SCRT/day
7-day bonding: 90 SCRT/day
14-day bonding: 125 SCRT/day

This adds up to ~$450,000 at the time of writing, or $150,000 per month.


[0]: IXO: Blockscan | Block Explorer by Forbole
[1]: LUNA: Ping Wallet
[2]: JUNO: Ping Wallet
[3]: Osmosis TVL: https://info.osmosis.zone/

21 Likes

Note that more details - such as which wallet this would go to in order to execute - still need to be worked out.

2 Likes

Big YES! will make funding initial wallets without relying on other people much easier.

1 Like

Cool that they match the value with OSMO, sounds like something secretswap should explore doing. YES from me

3 Likes

As long as this happened its worth a try.

1 Like

Great proposal, however, we should ask for more LP incentives

@guy does SCRT Labs plan on helping with incentivized pools, or should this be community funded?

5 Likes

Good point. @JXR50 do you know if the foundation has a stance on this as well?

Love this idea.
On the community funding / SCRT Labs help (in the event that they’re planning to help), would it be worth opening it up to community funding then if the full amount isn’t met for the rest to be covered by the foundation, perhaps with a maximum contribution?
Just a thought :slight_smile:

Amazing! I must try with SCRT!

I second this, I feel like we should have a broader liquidity incentivizing strategy (meaning also incentivize it on our DEX) - unclear if this topic has been provided for already, adding @Ewais001 / @Iowascero as well

1 Like

Love the idea! OSMO and ATOM will bring a lot of liquidity to Secret Netework

3 Likes

I have a few updates to speak on:

  1. I’ve broken up the pools into bonding periods (1 day, 7 day, 14 day)
  2. The SCRT can be deposited into any wallet the network deems trustworthy. Once they’ve received the funds, they create a gauge transaction for each bonding period per pool, depositing the appropriate SCRT into each. @JXR50 is there someone you’d recommend for this? I’m happy to do it, but I want approval from the community before just adding my address to receive such a fund.
  3. Speaking with numerous community members in both Secret Network and Osmosis, they’ve encouraged increasing the incentive amount. Does anyone take issue with increasing the SCRT per pool per day to 300 SCRT? Split across the bonding periods as 50/100/150 per pool?
6 Likes

I do believe the SecretSwap working on adding incentives to SecretSwap right now! Incentivized pair listing change for SecretSwap

2 Likes

Their Prop 47 passed an Incentive Matching Program: Mintscan - Chain explorer by COSMOSTATION

3 Likes

There probably will be more incentives.
Many of the Osmonauts are fond of Secret Network as well, so what will probably happen is they would incentivize the SCRT/OSMO pool (and perhaps other SCRT pools, such as SCRT/ATOM, SCRT/UST, etc.) to some extent regardless of whether Secret Network allocates SCRT for the Incentive Matching Programs. Then, if Secret allocates SCRT for the Incentive Matching Program, Osmosis would match that ON TOP of what they were already going to incentivize.

3 Likes

Yep, that’s correct! I’ll be creating a commonwealth (Osmosis’ forum) post today for their side of the equation.

1 Like

I think this is a very good idea. I also think it’s important to try to get this going as soon as possible once IBC is fully enabled.

Also, not sure that we’ll be able to specify how much SCRT goes to each gauge (1-day, 7-day, 14-day)… it might just be that an amount is allocated to the pool and their own gauge breakdown dictates how much goes to reward various bonding durations. Please correct me if I’m wrong.

Another potentially exciting thing to learn is whether Osmosis is able to give OSMO for incentive or incentive matching program for an OSMO/SCRT (and maybe a OSMO/SEFI?) pool on SecretSwap.

1 Like

I’m 100% sure we can :slight_smile: I spoke with the devs about it already. You can read more here: osmosis/x/incentives at main · osmosis-labs/osmosis · GitHub

Hm. Good question, I have no idea. I don’t believe it’d be possible from SecretSwap’s perspective (right now), unfortunately.

2 Likes

Here is the proposal for adding incentivized pools. A matching proposal will follow.

4 Likes