[Defrost #03] — Adjustment of AVAX/MELT liquidity pool incentives

Proposal Type: Modification of Liquidity Mining Incentives

Proposer: Defrost Team

Proposal: This proposal is to vote on whether and how to adjust AVAX/MELT liquidity pool incentives.

Background:

Currently, the protocol is simultaneously rewarding AVAX/MELT with USDC.e and Joe, with an APR of roughly 100%. The size of the AVAX/MELT pool is around $700K.

• 50,000 MELT tokens are allocated to the liquidity providers in the H2Oav3CRV pool per day, as basic rewards.
• 1000 MELT tokens are allocated to the liquidity providers in the AVAX/H2O pool on Trader Joe per day, as basic rewards.
• sMELT stakers see their rewards compounded by 0.2% per day.

Details:

As discussed in the forum, the liquidity of the AVAX/MELT pool on Traderjoe is still not deep enough. We intend to find a better way to incentivize the AVAX/MELT pool, while still maintaining the MELT emission at a reasonable rate.

The options should follow the premises below.

• The total MELT incentives will not be increased.
• Options should be compatible with the smart contracts we have deployed.

Possible options:

Option 1. Stays unchanged.

Option 2. Migrate 3000 MELT/day as incentives from the H2Oav3CRV pool to AVAX/MELT pool, as basic rewards, and launch a similar boosting mechanism in the AVAX/MELT pool. (NOTE: Due to the current mining contract, USDC.e rewards will be terminated)

Option 3. Decrease the sMELT daily compounding rewards from 0.2% to 0.1%, migrate 3000 MELT/day as incentives to AVAX/MELT pool, as basic rewards, and initiate a similar boosting mechanism in the AVAX/MELT pool. (NOTE: Again, due to the current mining contract, USDC.e rewards will be terminated)

Option 4. Decrease 2000 MELT/day incentives in the H2Oav3CRV pool, and decrease the sMELT daily compounding rewards from 0.2% to 0.15%. Increase 3000 MELT/day as incentives in the AVAX/MELT pool, as basic rewards, and create a similar boosting mechanism in the AVAX/MELT pool. (Once again, due to the current mining contract, USDC.e rewards will be terminated)