BIP001 Increase Boardroom Revenue by Adjusting Liquidity Mining Revenue Allocation

Summary: This proposal aims to engage the Bagel community in a discussion on how to distribute the revenue from liquidity mining on Bagel Finance. I propose that the Boardroom's revenue can be increased from the current 10% to 85% of MDX rewards to solve the sandwich attack problem and to increase the profit of the protocol.

Abstract: The proposal is based on the fact that the majority of leveraged yield farmers' gains are from BAGEL rewards, rather than the liquidity mining revenue itself. For all strategies, the liquidity mining revenue is a few times lower than the BAGEL rewards. Therefore, to transfer most of the liquidity mining revenue to the Boardroom has a negligible impact on the earnings of leveraged miners. On the contrary, I believe this change will actually significantly increase the earnings of leveraged yield farmers instead of reducing them. See more below.

Motivation: The proposal affects two parties in the Bagels Finance ecosystem: leveraged yield farmers and veBAGEL holders (the Vault or deposit pool is not affected). I propose that distributing most of the liquidity mining revenue (85% of MDX rewards) to the Boardroom is beneficial to both parties. Benefits for veBAGEL holders: The benefits here are obvious. The weekly rewards for veBAGEL holders will increase. This proposal, if implemented smoothly, will increase the demand for veBAGEL. This will thus directly increase the price of BAGEL because BAGEL is required to mint veBAGEL. Benefits of leveraged yield farmers: as the price of BAGEL increases (due to the increase in returns for veBAGEL holders), the earnings from the position reward pool should also increase accordingly. This will incentivize users to use leveraged products, due to an increase in revenue, this will form a virtuous cycle.

Conclusions:

• Increase returns for veBAGEL holders.
• Help to increase the price of BAGEL, which increases the rewards of deposit pools and leveraged position pools.
• Increase the demand for veBAGEL. If BAGEL reward is the only source of return on the leveraged mining pool, yield farmers will reduce the sale of BAGEL tokens and choose to lock and mint veBAGEL in order to get mining boosters, Boardroom rewards and other rights to maximize returns.