Adjust and Extend the LP Rewards

Background:

The rewards rate for the MANA-$DG and DAI-$DG Balancer pools are currently 2,400 $DG/week each. Based on the DG whitepaper, Weeks 6 - 10 these rewards rates will be 1,600 $DG/week each; Weeks 11 - 15, 1,000 $DG/week each; Weeks 16 - 40, 800 $DG/week each.

The DG Team has also chosen to fund 300 $DG/week in rewards for the Uniswap V2 ETH-$DG pool from the Ecosystem Fund, but there isn’t a published timetable yet for this allocation.

Proposal:

1. Adjust the Balancer pool rewards to 1,200 $DG/week each for Weeks 6 - 10 and to 600 $DG/week each for the remainder of the 40 weeks. This frees up 18,000 $DG.

2. Allocate this 18,000 $DG across 60 weeks to the Uniswap V2 ETH-$DG pool (300 $DG/week) on top of the 300 $DG/week from the Ecosystem Fund. The total LP rewards to the Uniswap V2 ETH-$DG pool would be 600 $DG/week for Weeks 6 - 65.

Rationale:

This new rewards schedule would be better for ecosystem growth: It will reduce short-term $DG inflation, extend LP rewards, and incentivize providing liquidity to the Uniswap V2 ETH-$DG pair which supports much larger $DG trades with less slippage because the ETH-$DG pair is 50/50 while the Balancer pools are 98/2. Side note: With the same liquidity, the Uniswap pool ties up 25x more $DG via staking, which should be a tailwind for the $DG price.

This new rewards schedule is also good for liquidity providers: It does not remove any rewards from the LP ecosystem; in fact, it codifies the 300 $DG/week Ecosystem Fund spend toward the ETH-$DG pair, increasing the total allocation to LP providers.