Retire BTC/BNB and ETH/BNB pools

ABSTRACT

This proposal analyzes the performance of the BTC/BNB and ETH/BNB pools and finds they have a minimal positive impact on Planet due to low trading volume and therefore fee generation. It also shows that the pools run at a significant deficit in terms of emissions received vs fees generated for the protocol. This proposal recommends retiring the BTC/BNB and ETH/BNB pools and redirecting their GAMMA allocation to the other pools.

DISCUSSION

The BTC/BNB and ETH/BNB pools are operating at a significant deficit when comparing emissions received vs fees generated for the protocol. Due to low liquidity, resulting in unfavorable swaps, the LPs have low trading volume with most swaps being arbitrage bots. They therefore have a small and insignificant impact on the Planet ecosystem and its users.

Currently, both pools receive 2400 GAMMA per day.

Breaking down fees generated by LPs: During November and December, the total volume through each LP was approximately:

BTC/BNB: $502,000 ETH/BNB: $392,000

Current tokenomics result in 0.12% of the volume going to the protocol as fee generation, meaning: BTC/BNB = $602 worth of fees ETH/BNB = $470 worth of fees

During this time, each pool received $4,500 worth of GAMMA (based off the current price of GAMMA).

With 50% of the fees buying GAMMA for the reserve, these two pools combined ran at an $8,464 deficit over the two months or approximately -$50,000 a year.

Take note the stated deficits are lower than the true deficit due to the price of GAMMA being higher over November, and December.

CONCLUSION

The GAMMA allocation for the BTC/BNB and ETH/BNB pools should be redirected (pools retired) to AQUA/BNB, GAMMA/BNB, BNB/BUSD, and the new StableSwap (allocation changes at the discretion of the foundation).

Increasing the GAMMA allocation to these pools will incentivize increased liquidity resulting in higher trading volume due to favorable swaps, new users due to competitive APY's, and increased price stability for AQUA and GAMMA.