Proposal for amending the yield farming mechanics (2/5)

PROPOSAL 2 - SPLITTING REWARD BUCKETS INTO SMALLER PEICES FOR EACH PAIR TAKING IL AND TX VOLUME INTO ACCOUNT

Provided that Proposal 1 is accepted, for PNG and AVAX pools are split, the reward for each pair in the respective bucket should be determined hourly.

Currently it is based purely on the amount of liquidity in that pool. I propose that the liquidity pool factors should be adjusted taking the IL within the calculation period into account such that the more IL in that specific pool, the more rewards it should get. This will work as a QUASI INSURANCE AGAINST IL for the LPs.

Also, the pairs with more tx volume require a bigger liquidity pool. I propose to take the transaction volume also into account when determining the rewards for each liquidity pool.

The IL adjusted liquidity weight should be 60% and the tx volume weight should be 40%.

Below is a numeric example (see https://gov.pangolin.exchange/t/proposal-for-amending-the-yield-farming-mechanics/838 for the table view)

Liquidity (PLG) @ begining IL during calculatio period IL adjusted liquidity weight reward factor (60%) tx volume (mUSD) -40% Overall bucket weight Daily PNG reward A B C = A* (1+B) D E = 0.6 x C/∑C + 0.4 x D/ ∑D PNG ETH 1000 20% 1,200.00 2.00 16% 15,844 PNG BTC 2000 10% 2,200.00 3.00 27% 26,623 PNG AVAX 5000 0% 5,000.00 6.00 58% 57,532 TOTAL 8000 8,400.00 11.00 100% 100,000

Specific note on AVAX PNG Pools: I suggest it gets rewards from both PNG and AVAX buckets.